ERISA Compliance — Keep This Year-end Checklist Handy

ERISA | November 16, 2017 | Holtzman Partners

Now is a good time to begin preparing a year-end checklist for your qualified retirement plan. Creating a checklist is a good way to help ensure that your plan remains in compliance with ERISA regulations throughout the year. The checklist can also serve as a valuable reminder of upcoming deadlines for required ERISA compliance tasks.

Check Your Plan

The IRS suggests that sponsors check retirement plans against the following criteria at least once every year:

Plan document updates and terms — There have been a number of changes to laws affecting retirement plans in recent years, so your plan should be updated to reflect them if it hasn’t been yet. You should also make sure that plan operations are based on plan document terms, since failure to follow these terms is a common problem on plan audits.

Plan definition of compensation for deferrals and allocations — Different definitions of compensation are sometimes used for different purposes, so be sure you’re applying the right definition as detailed in your plan document.

Employer matching contributions — Make sure that the plan terms are being followed when allocating employer matching contributions to appropriate employees.

401(k) ADP and ACP nondiscrimination tests — Your plan will likely need to satisfy these tests on an annual basis.

Identification of plan eligible employees — All employees who are eligible to participate in your plan must be given the opportunity to make elective deferrals. One way to reduce the risk of omitting eligible employees is to provide your plan record keeper with information on all employees who receive a Form W-2.

IRC Section 402(g) limits — Deferrals in excess of the 402(g) annual limits must be distributed. Failure to do so may result in additional taxes and penalties for both your business and participants.

Deposit of employee elective deferrals — These must be deposited on a timely basis, which the IRS considers to be as soon as they can be reasonably segregated from the employer’s general assets. If deferrals have not been contributed in a timely manner, the plan needs to evaluate the need for corrective action.

Participant loans — These must meet IRC Section 72(p) and plan document requirements. Any participant loans that are in violation of these requirements or in default may be treated as taxable income to the participant.

Hardship distributions and top-heavy minimum contributions — Plan terms must be followed for all hardship distributions that are made. Also, minimum contributions must be made for non-key employees if the plan is top-heavy.

Form 5500 — This form must be filed annually by most 401(k) plan sponsors.

ERISA Compliance Deadlines

Following are 2018 plan year deadlines for some of the most common ERISA compliance tasks:

Provide applicable 2018 safe harbor 401(k) plan and
Qualified Default Investment Alternative (QDIA) notices
12/1/17
Provide 4th quarter benefit statements to participants2/13/18
Make 2017 employer contributions in order to take
a deduction in fiscal year 2017 (unless extension filed)
3/15/18
Distribute first-year Required Minimum Required
Distributions (RMDs) to participants who turn 70½ in 2017
4/2/18
Provide first quarter benefit statements to participants5/15/18
File 2017 Form 5500 or extension (Form 5558)8/1/18
Provide second quarter benefit statements to participants8/15/18
Make 2017 employer contributions in order to take
a deduction in fiscal year 2017 (if extension filed)
9/17/18
Distribute 2017 Summary Annual Report (SAR) to
participants if Form 5500 filed on time
10/1/18
File 2017 Form 5500 (if extension filed)10/15/18
Provide third quarter benefit statements to participants11/13/18
Provide applicable 2019 safe harbor 401(k) plan and
Qualified Default Investment Alternative (QDIA) notices
12/3/18
Distribute 2017 Summary Annual Report (SAR) to
participants if Form 5500 extension is filed
12/15/18

Keep It Handy

We recommend that you keep this checklist handy to help ensure that your plan remains in compliance while preparing for ERISA deadlines over the next year.

Our team at Holtzman Partners can help answer your questions on these ERISA requirements and deadlines. To learn more, please give us a call at 512.610.7200.

Our team provides the technical experience and industry depth that your team can trust.