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401(K) Compliance And Reporting – How Does It Matter?

Recent IRS research found that 401k plans are the most non-compliant plan type in the retirement plan universe. 

It is vital that 401(k), the most popular employer-provided retirement plan, maintains the highest compliance level possible for the future private retirement system. To get reliable 401k compliance services you can visit different websites.

To ensure compliance with their plans, most employers hire a Third Party Administrator (TPA). They believe that they are protected in case of an error since the TPA company provides this service. 

Both the IRS and Department of Labor believe that compliance is up to the plan sponsor. For any non-compliance with the plan, the sponsor is responsible for any penalties or fines. 

TPA firms often require their clients to sign engagement agreements. This clause states that the plan sponsor is responsible for verifying the accuracy of the reports. 

Hire an independent consultant if you don't have the necessary knowledge to review all compliance implications of your plan over the past few years. You will feel more at ease if the consultant checks everything and finds nothing.

They can help you fix any problems they find and may also be able to assist you with working with your TPA firm to cover some of the fees. If you are unable to trust your TPA, a consultant may be able to help you find a new TPA company.