March 9, 2020 by BC2

Secure Act of 2019: Its Consequences on Retirement and 401k Compliance

The SECURE Act of 2019 approved by the Senate on Dec 19, 2019 is targeted towards helping every community when it comes to their retirement financial future. It consists of significant provisions aimed towards improving access to tax-advantaged accounts and encourages small businesses to provide retirement plans for their workers. Some of the major elements introduced in the bill included raising the minimum age for required minimum distributions from 70.5 to 72 years of age and giving students the ability to repay their student loans using 529 accounts (up to $10000).

Secure Act of 2019: Its Repercussions on Compliance Benefits

As far as small businesses are concerned, here are a few incentives contained in the retirement SECURE Act that encourage and help employers become plan sponsors.

1) Increasing Business Tax Credit for Plan Startup Costs – The current cap will be raised from $500 up to $5000 depending on special circumstances to make the process of setting up retirement plans more affordable for small businesses.

2) Automatic Enrollment – For plans that add automatic enrollment, small businesses will be provided with an additional $500 tax credit for 3 years.

3) Simplification of Rules – Rules related to qualified non-elective contributions have been simplified.

4) More Time – The time for adopting new plans has been extended beyond the end of the year to the date when companies file their tax return.

5) Reduced Plan Administrator Costs – Certain contribution plans with a common administrator now come with a consolidated Form 5500 to reduce costs. It is also important to note that penalties incurred by failure to file Form 5500 and withholding notices have been increased.

The SECURE Act also allows small employers unrelated to one another to come together and open multiple employer plans or MEPs. This can significantly reduce not only overall costs but administrative duties as well. MEPs are also referred to as PEPs (Pooled Employer Plans) and come with a single plan document, Form 5500 filing and independent plan audit. While MEPs could change the game for small businesses, it is important to note that there will be certain restrictions too such as standardized investment options and requirements that might be too much of a hassle to handle.

Until recently, the U.S retirement system was plagued with numerous problems that required a large portion of workers to supplement their social security with their personal savings. Due to reduced scope and lack of incentives, only 55 percent of the adult workforce was seen to participate in retirement plans, according to a 2018 report. However, a lot of things have been changed with the SECURE Act. Although it isn’t perfect, it certainly is a step in the right direction. It helps workers of all ages and those who come from all communities to be better prepared for their retirement age by allowing them different options for investment. Here are some of the ways in which the retirement Secure Act will bring about more positive changes to workers everywhere in the country.

1) It will now be easier for small businesses to set up 401ks as the cap under which they can auto-enroll employees (safe harbor retirement plans) has been increased from 10 percent to 15 percent.

2) It allows businesses to have part-time employees to participate in retirement plans. However, to be eligible, employees must work either 1000 hours in the designated year or have worked 3 years with 500 hours of service. This increases the scope of retirement plan participants by a significant margin allowing more people to have a choice in their financial future.

3) Permits participants to withdraw $5000 from 401k accounts with zero penalties to cover the cost of adopting or having a child.

4) Encourages employers to have more annuities in their 401k plans. Businesses now don’t have to worry about any legal liability that may arise from the annuity provider’s failure to meet financial obligations and don’t have to choose the lowest cost plan either.

5) Qualified disaster distributions will now have their penalties waived off if they are taken before the age of 59 .

The retirement SECURE Act of 2019 creates significant changes for small business owners and widens the scope for enrollment, allowing more people to sign up for a better financial future. Whether it becomes a game-changer is still unknown but it is indeed a step in the right direction.

Does your business need our services? We can help!

Form 5500, wrap plan document, 401k, retirement benefits & more ERISA Compliance

February 26, 2020 by BC2

Retirement Plan Compliance Guidelines You Must Know

The Employee Benefits Security Administration or EBSA is responsible for assuring that all 401k plans are in compliance with the Employee Retirement Income Security Act (ERISA). In recent years, the number of compliance audits conducted by both the IRS and the DOL has increased exponentially. It is the duty of the plan administrator to maintain, understand and ensure compliance to minimize the risk of their plan being audited. Given below is a retirement plan compliance guide that may help you to prevent any compliance issues from arising.

retirement plan compliance time

1) Reviewing Key Documents

There are three main documents that must be maintained, reviewed and retained every year at all costs. One of them is the most recent plan document that includes updated agreements. The other is the plan amendments document that includes any changes as per ERISA. The third one is the latest service agreements with TPAs. It is important for the administrator to not only review these files but also have signed copies of them.

2) Understanding the Plan Document

Every retirement plan will have a set amount of provisions that define the eligibility of participants and the benefits they can gain from it. The administrator must always go through the plan document to understand every aspect of eligibility from age requirements, service requirements to employee classification to ensure that all eligible employees get included in the plan. The document will also contain key information pertaining to the sources of compensation such as bonuses, severance pay, and taxable benefits, etc.

3) Understanding TPA Duties

Misunderstanding TPA’s duties is another reason why a retirement plan compliance issue may arise. To prevent errors from occurring, it is vital to keep a signed copy of the latest service agreements and read them fully to understand its full scope. Calculations related to employer contributions are mostly done by the TPA but some service agreements might indicate that it is the responsibility of the plan administrator to do so. Therefore, it is important to ensure that there is no confusion regarding the duties or it might lead to negligence and compliance issues in the end.

4) Adherence to Regulations

Retirement plans have a ton of rules and regulations to follow and sometimes a few of them might slip through the crack and never get enforced. For instance, most plans have a provision where employees who leave and then get rehired within a set amount of time can gain eligibility for participating in a 401k plan but it is often overlooked by a lot of companies. When it comes to an audit, even the tiniest detail will be under heavy scrutiny.

5) Ensuring Consistency of Day to Day Operations

It’s not sufficient to just have a plan document that meets all the required compliance needs. Day to day operations of the plan must be consistently upheld to all the rules and regulations as per the law. Sometimes, regulations may change before the sponsor is required to make changes to the plan. In such cases, operations might vary from the written terms of the plan. By maintaining consistency in the day to day operations of the plan, both the administrator and the sponsor can better prepare for any hurdle that may come their way.

By ensuring that there aren’t any issues when it comes to retirement plan compliance, everyone benefits, including the business owner and his/her employees. A happy workforce will always be a productive one too. We provide a number of different services such as Form 5500, ERISA compliance, benefits compliance, 401k and our specialty wrap form planning aimed at helping companies keep all their plans in accordance with the rules and regulations set by the IRS and DOL.

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Phone: (515) 244-2424

January 8, 2020 by BC2

Retirement Wrap Plan Consultants Are Ready For Hire

The Importance of Hiring Retirement Wrap Plan Consultants

A wrap plan is a document that organizations use to ensure that they are compliant with the Employee Retirement Income Security Act of 1974 (ERISA). It also helps them to reduce costs pertaining to the administration of health and welfare benefit plans provided to their employees. Employee welfare benefits covered by ERISA include a host of programs such as insurance, medical, dental and accidental death coverage. Non-compliance will result in penalties that may amount to $110 per day or more. It would be wise to hire retirement wrap plan consultants to ensure that such a predicament would never happen in the first place.

They can help you do the following:

Regulation Monitoring

Rules may evolve and change over time. Having a consultant would make it easier to ensure that the company is following the latest rules and guidelines properly.

Share Analytics

Retirement wrap plan consultants can monitor the percentage of people who are on track for a successful retirement future and share it with the employer to gauge the level of success of their retirement plans.

Summary Reports

Companies can obtain a summary of their plans along with certain key metrics such as total plan assets, participation rate, contribution types and savings rate. This will help the company find problematic areas if any.

Participant Engagement

This gives the employer a unique insight into the number of employees who are deferring at various rates so that they can review it and see if they are doing enough to maximize employer contributions. This also includes information about how many loans the participants have taken out and if there are any outstanding balances. This way, the company can review the status of each loan and see if the employees are following the required rules and guidelines.

Investment Plans

In a single file, the company will be able to see the summary of the different plans and important data points such as expense ratio, beginning balance, net flow and ending balance.

Plan Activity

This gives a glimpse into transactions that occur during reporting periods such as asset flows, disbursement and rollovers. To get more clarity on the matter, the transactions can even be divided into specific types like contribution, distribution and loan payment.

Compliance Summary

The most important aspect of the retirement wrap plan consultant’s job is to provide a summary of important compliance issues and areas where there might be a problem. If any area gets flagged, the company needs to solve it as soon as possible to ensure that they meet all compliance requirements. Some of the known categories include top heavy testing, 401k non-discrimination tests and participant deposit timing. Some even provide short notes for reference so that the employer can move quickly and take action before it’s too late.

Many companies are afraid of raking up penalties for not following the correct guidelines but hiring a retirement wrap plan consultant would help alleviate that fear. There are several retirement wrap plan consultancies out there today. Creating a wrap plan document is no easy feat and requires a lot of attention to detail and compliance. Once it is done, it can vastly simplify the process by having the required information in one place and eliminate the need for multiple Form 5500 submission.

December 27, 2019 by BC2

Who is Exempt from Filing Form 5500?

Is your business exempt from filing Form 5500?

The Form 5500 is an annual report that is filed with the department of labor containing information about the financial conditions, investments and operations of a 401k plan. It is a vital part of any business that provides a retirement plan to its employees. Generally, a company has to deposit their employee’s salary deferrals no later than the 15^th business day of the month after the contribution date. Small businesses that have 100 or fewer employees get an extension of 7 days after the collection of salary deferrals.

Plans not covered by ERISA or Employee Retirement Income Security Act are exempt from filing form 5500. If you are wondering who is exempt from filing Form 5500, then read on.

1) Business Owner Only Plan – A retirement plan that covers only the business owner and the spouse (if applicable) is usually exempt from filing form 5500. This is only possible if the total plan’s assets are worth $250,000 or more, as of the first day of the plan year. This is because it assumes that the business doesn’t have employees that are eligible for the plan. If employees are improperly excluded, then the exemption is void and the Form 5500 must be filled.

2) Non-Erisa 403(b) Plans – 403(b) plans are generally exempt from filing Form 5500 and so Churches and government institutions usually get an exemption as they both frequently sponsor it. Apart from them, if an employer has limited involvement in its operation and maintenance, then that plan will also get an exemption. However, it is important to note that it is very hard to define what “limited involvement” means and so in such cases, one should consult the exemption status with an entity that has in-depth knowledge about it. Not all 403 (b) plans get an exemption.

3) Unfunded Welfare Plans – If a welfare plan has less than 100 participants at the start of the plan year and is insured or entirely unfunded, then there is no need to file Form 5500. So what makes a plan to be considered unfunded? Well, if the employer is paying the full cost of the plan from their general account, the plan is considered to be unfunded. If there is a trust involved or if the cost comes from a specific account (where the participant contributions are separated from general assets), they won’t get an exemption.

4) Plans with Only Certain Specified Benefits – If the plan provides only certain specified benefits then there is no need to file Form 5500 even if the number of participants is high. Daycare centers, certain apprenticeships and union plans, etc. generally get an exemption.

If you are unsure as to whether you or your company is exempt from filing Form 5500 you need to consult with a knowledgeable authority. Otherwise, you may end up with a penalty of $25 per day up to a maximum of $15,000 from the IRS and up to $1,100 per day from the department of labor. Most companies realize their mistake only after they receive a letter from the IRS or DOL (department of labor). As this letter is usually sent a year after its due, a substantial amount of penalty fees may be levied upon the company. It’s always wiser to be cautious to minimize potential risks especially when it comes to the IRS. We provide a number of different services ranging from Form 5500 preparation to providing retirement wrap plans to help companies navigate easier when it comes to financial hurdles.

December 10, 2019 by BC2

Responsibilities and Duties of a 401k Plan Administrator

401k plans are helpful to secure employees’ financial future but they are not without any hassles or red tapes.

Hiring someone for 401k plan administrator duties can save your business money.

There are a ton of regulations put up by the IRS that the plan has to be in compliance with. Not adhering to these regulations can lead to losing a substantial amount of money through penalties. It is the responsibility of the administrators and sponsors to ensure that the plan follows all regulations without any deviation. Some of these duties can be outsourced to a third-party service provider but there are a few that need to be directly overseen by administrators themselves.

Listed below are a few 401k plan administrator responsibilities.

1) Annual Compliance Testing

One of the most vital responsibilities of a 401k plan administrator is the annual compliance testing. According to the requirement of the IRS, every plan has to undergo non-discrimination tests every year to ensure that employees are treated fairly. These tests help to make sure that highly compensated employees don’t benefit more than other employees when it comes to tax deferrals. If the plan fails in any non-discrimination tests, then the administrator has to take steps to rectify it. This may include refunding highly compensated employee’s contributions along with the tax benefits to decrease the average contribution levels or raising the contribution rates of lower-earning employees. It is well within the right of the administrator to choose any of the above or a mixture of the two as per the situation.

2) Overseeing Loans

If a 401k plan permits employees to take out a loan against their plan, then it is the duty of the administrator to ensure that it meets all of the guidelines required by the IRS. These include making sure that the account has sufficient balance to process the loan and that the future payments will be repaid on time. If a loan defaults, then the administrator has to take action to resolve the issue as well. If the withdrawal qualifies as a hardship, then he/she must prepare and retain the necessary documents for verification purposes.

3) Communication

It’s not necessary for all employees to understand how the 401k plan works and the various regulations it must follow. If an employee has any doubts about the matter, then the administrator has to educate him/her regarding the various aspects of the plan. An administrator can also help the employees understand how future changes could affect the 401k plan so that they can prepare for any consequences that may follow. It is also the responsibility of the administrator to provide an all-inclusive summary report on the plan as well as an annual benefit statement to all the participants.

There are many other fiduciary responsibilities that come with the administrator’s post such as ensuring that all contributions are deposited and recorded, keeping all plan reports up to date, maintaining the plan investment certificates, etc. While it’s always better for a business to handle these tasks internally, some companies hire third-party firms to handle the administrative tasks of a 401k plan. With today’s technological advancements, getting assistance off-site isn’t as risky as it was in the past. Choosing the right firm that has a proven track record of successfully managing 401k plans can provide a lot of benefits to companies when it comes to time and effort saved.

We help companies with retirement wrap plan documents that combine all group insurance policies and contracts that provide welfare benefits into a single plan. These plans help in not only ensuring legal compliance but also provide more clarity to everyone concerned.

November 7, 2019 by BC2

An Essential Guide to Understanding ERISA Wrap Documents

Essential Guide to Understanding ERISA Wrap Documents

Many employers understand the significance of complying with ERISA (Employee Retirement Security Act) plan documents. These documents hold disclosure requirements for various retirement plans, including 401(k). But it’s startling to see some employer’s poor attention towards health and welfare benefit plans in their companies.

Usually, employers mostly running smaller organizations assume that benefit summaries offered by some insurance providers meet all ERISA regulations. However, the truth is that all employers in the U.S are obligated under ERISA laws to fashion employees with all the information missing in insurer’s booklets.

What are ERISA Wrap Documents?

As an employer, you might be wondering what an ERISA Wrap document is. Well, regardless of the size of your company, ERISA laws require all employees to provide Wrap or SPDs (Summary Plan descriptions) to employees participating in their plans. These documents contain all plan descriptions as well as employee benefits. For instance, they include Tax IDs, Address and the names of the beneficiaries, etc. They are the simplest way of employers to comply with ERISA regulations.

Wrap documents “wraps” around insurance policies or cover with the plan benefits regulated by the insurance company. Additionally, wrap documents are designed to supplement relevant information for ERISA compliance. Furthermore, employers may use Wrap documents to merge employee’s welfare plans into one mega-wrap plan. This way, extra costs are minimized during the filing of annual reports.

Why are Wrap Documents Important?

Plan Consolidation – As earlier mentioned, wrap documents helps in merging employee’s health and welfare benefits into one “umbrella” plan. They consolidate all plan benefits and provides an overarching summary of admins, plan type, benefits, and fiduciaries, among other vital details in an easy to understand manner.
Simpler ERISA Compliance – They reduce the employer’s workload and allows for easier compliance with ERISA, IRS, and DOL regulations. In case you have been submitting Form 5500 per each benefit plan annually, then a Wrap document can remove the repetition processes.
Compliance with Federal Laws – As an employer, you have the sole responsibility to provide clear information on procedures, employee benefits, and plan details. Additionally, you’ll be forced to protect employee’s plan assets no matter who provides your benefits to comply with federal regulations.

How to Adopt a Wrap Plan

When planning to adopt a Wrap plan, the process is quite simple. First, you need to determine which benefit plans your organization sponsors that are subject to ERISA. You can as well identify affiliate employer plans that require filling the annual Form 5500.

Then, you’ll need to analyze insurance arrangements, coverage terms, and plan’s administration processes. In this step, consider things such as eligibility, plan year, commencement date, and claim procedures.

The next step is to prepare the Summary Plan Descriptions and the plan document. Finally, you can adopt a Wrap plan after all the documents in the step above have been reviewed thoroughly. Do not forget to distribute the SPDs to all eligible employees.

Use this comprehensive guide to understand more information on ERISA compliance and Wrap documents. Are you still stuck on adopting an effective Wrap Plan?

Get ERISA wrap document services for your business.

Call: (515)-244-2424

Email: info@bc2co.com

Or Request Quote Here

October 10, 2019 by BC2

Understanding Plan Documents And ERISA Compliance

Understanding Plan Documents And ERISA benefits compliance in a blog post.

What are Plan Documents?

Plan documents are crucial in describing the terms and conditions of any given plan’s model of administration and operation. They are vital requirements for each employee’s welfare plan maintained by an employer in written form and in compliance with ERISA laws. Plan documents are not defined by an insurer’s Certificate of Coverage, Master Contract, or the Summary of Benefits. Additionally, the same can be said concerning Summary Plan Descriptions (SPDs). It is possible for ERISA plans to exist even in the absence of written documents – non-compliant.

ERISA (Employee Retirement Income Security Act) is a typical United States federal law. This law was passed to protect different employee plans, including profit sharing, pension, and retirement plans. Additionally, it safeguards welfare benefit plans such as insurance plans covering disability, health, dental, life, and other minor plans. The Department of Labor primarily enforces ERISA compliance in the U.S.

How Can One Differentiate Plan Documents and SPDs?

Maybe you’ve just been contracted by a particular company to assist in implementing healthcare & welfare plans subject to ERISA. How do you contrast plan documents and SPDs? Well, ERISA expects employee benefit plans to have both SPD and plan documents. However, as we shall discuss below, any one of the two can serve dual purposes.

Plan Documents – in plan document definition, those subject to ERISA compliance must be “formulated and managed per written instruments” known as plan documents. Plan documents are extensive documents that define the rights of participants and their beneficiaries. They are also utilized by the specific plan admins as a reliable guide while making decisions. They highlight available benefits, eligibility, named fiduciary, funding, amendment clauses, and plan’s responsibility allocation.
Summary Plan Descriptions – SPDs are other crucial documents required by ERISA for employee benefit plans. They are vital in communicating summarized plan information to parties involved. SPDs may include eligibility requirements, benefits descriptions, and reasons for loss/denial of benefits. Other things include ERISA’s participant statement of rights and the process of claiming benefits. These documents must be written to be easily understood by all parties involved.
Combined PD and SPD – A single document may be used to serve as plan document as well as SPD. If this approach is used, it must be as per ERISA’s plan document laws as well as SPD’s regulations.

Why ERISA Compliance is Necessary for Health and Welfare Plans

Regardless of their size, healthcare & welfare benefit plans are strictly required to obey ERISA regulations. These regulations apply to all employer-financed group healthcare plans, including the full and self-insured plans. Additionally, private companies, proprietorships and partnerships must comply too. Only a handful plans such as governmental (state, federal, county, and city) plans and religious plans are exempted from ERISA regulations. Furthermore, benefits deemed as “regular payroll practices” such as overtime pay are also exempted.

What are the Requirements for ERISA Retirement Plans?

ERISA has laws that protect employee funds deposited in their retirement accounts during the entire working period. But it should be understood that employers are not obliged to institute retirement plans for their workers. But for those who do, they are subject to ERISA compliance and thus should set the required minimum retirement plan standards. A retirement plan is termed ERISA compliant if:

There is ease access of written information by parties involved concerning their Qualified Retirement Plan finances dished out via hard copies or periodically through their mails.
Employers can easily explain the process required by participants to claim their benefits without any difficulty.
Highly diversified plans that help minimize risks of financial loss during investment.
The parties involved have a proper understanding of their respective retirement plans. Additionally, employees require to be furnished with periodic financial statements concerning their retirement accounts.

What Happens if You Fail to Comply?

Employers may find themselves in hot soup for failing to comply with ERISA laws and may be slapped with fines as high as $1,100 daily per each late Form5500. Additionally, late submission of SMM, SPD, OR SAR to involved parties may attract up to $110 in daily fines. These stiff penalties are applied to each plan and are cumulative. Failure to comply with these laws can amount to employee complaints that may cost more time and money on the employer’s part.

Understanding ERISA compliance is crucial for employers and all parties involved. Companies or organization essentially need to hire experts well-versed with ERISA compliance to handle related matters. We hope this post helps you have a better understanding of document definitions as well as ERISA compliance.

Benefits Compliance Consultants can help you.

September 5, 2019 by BC2

All You Need To Know About Summary Plan Descriptions (SPD)

Summary Plan Descriptions (SPD) And All You Wanted To Know About Them

It is imperative for the Benefit Plans which are subject to Employee Retirement Income Security Act (ERISA) to furnish the workers with an SPD (Summary Plan Description) and this document must be kept updated as well. Summary Plan Descriptions can be considered to be the primary legal documentation for the purpose of communicating plan rights, benefits, as well as obligations to the workers of a business.

It is imperative to provide an SPD within a span of 3 months after covering an employee with this benefit plan. On the contrary, it will be possible to provide the SPD within 120 days in case the plan happens to be a new one.

Any info mentioned within an SPD is liable to modifications. In the event of any such change, it is feasible to restate SPD or even amend it by means of an SMM (Summary of Material Modification). A Summary of Material Modification is implemented for describing any alteration in the plan. In general, it will be imperative to provide an SMM within a span of 210 days following the completion of the plan year when the adaptation of the change took place. Nevertheless, it will be compulsory to provide the SMM within 2 months of the date when the change was adopted in case the alteration is related to a reduction of covered services or benefits.

To get the best effects, a lot of employers are in the habit of providing an SPD along with the enrollment materials of the plan before the plan is able to cover the employee, while the SMM will likewise be provided by the employers before the effectual date of modification. In case a plan is being amended by means of an SMM, it will be essential to restate the SPD for incorporating all SMMs and it must also be provided once again every 5 years to the participants.

Below, we have mentioned what descriptions must be included by the Summary Plan Descriptions or SPD plans as per the regulations of the Department of labor.

Descriptions to be included in SPD plans:

• Provisions for cost-sharing consisting of deductibles, premiums, coinsurance plus co-payment amounts for which the beneficiary or participant is going to be responsible

• Whether the plan will cover any new or existing drug

• Lifetime or yearly caps or any other restrictions on benefits provided by the plan

• The plan covers the preventative services to what extent

• Whether the plan provides any coverage for medicinal devices, procedures, or tests

• The limits or conditions that are applicable for obtaining the emergency medicinal care

• Limitations or conditions on the selection of specialty medicinal care providers or primary care providers

• It is also essential for the SPD to explain how will it be feasible to obtain the plan benefits as well as the procedure for appealing any denied benefit

• Provisions involving utilization review so as to obtain a service or benefit under the plan

The methods of delivery:

The SPD ought to be delivered by the administrator to the participants through reasonable calculation for ensuring actual receipt.

We like to mention another essential thing here: It is compulsory to treat any pursuant covered by children to a competent medicinal child support order (or their caretakers) as well as the surviving spouses as partakers for purposes of the rules of the SPD delivery.

The permissible methods of delivery are going to consist of the following:

• First class mail

• Hand delivery

• Electronic in case the worker does have any work-related access to the computer as an integral part of their day-to-day chores and:

The employer takes reasonably calculated measures to make sure that the system intended for furnishing the documents leads to the actual receipt of information which has been transmitted (for example, making use of return receipts, notice of any electrical mail feature which has been undelivered, and so forth)
The recipient is advised by the electronic notice that he or she will get hold of a paper copy without paying anything at all upon request
The recipient is informed by the electronic notice regarding the significance of the document

It will be imperative for the plan administrator to take appropriate and also sensible steps in case a disclosure consists of any personal info pertaining to the accounts as well as benefits of an individual, and he will do this with the intention of safeguarding that information’s confidentiality.

Do you have additional questions or need assistance with your Summary Plan Descriptions? We also do other compliance consulting including Form 5500, 401K and wrap plans. Do not hesitate to contact us with your business compliance issue. We are the experts in benefits compliance consulting!

www.bc2co.com

Phone: (515)-244-2424

July 5, 2019 by BC2

Technology Compliance Benefits Businesses

Compliance benefits businesses in many ways.

It is obvious we live in a world where technology has now become part of our daily lives. Technology has come to change so many things that were hard to accomplish to be easy tasks completed in a matter of minutes.

Technology has made life quite easy in all aspects not just in the business world. Communication has been enhanced greatly between people who are miles away but they can now see each other as they converse. Information from the head company will reach its branches in a short span of time thanks to technology.

However, there is no good thing that does not have its share of downfalls. Technology too has its limitations. Sometimes it may not be in compliance with the set ethics and standards. It has drastic setbacks in as much as it has made work much easier. In this article, you are going to learn about the benefits of technology in the compliance industry and also the disadvantages of technology as far as compliance is concerned.

Merits of Compliance Technology

It is through technology that compliance programs are able to reduce risk, enhance flexibility, increase efficiency and improve on their performance.

1. Reduce Risk

Your business requires you to roll out a risk-based compliance structure. Technology is known to manage risks more effectively. If you have sufficient knowledge on your compliance program as a complete loop then you have better chances of knowing how to handle when risks occur before they become catastrophic problems.

This will lead to an effective program and thus reduces instances of potential lawsuits. It ensures you reduce your expenses on insurance premiums. Risky activities will now have less impact on the organization’s core business.

Accessing real-time data enables you to find weaknesses and upcoming issues in your program. You will therefore be able to deal with that problem before it grows to a major disaster and hence continuance improvement of your program.

2. Enhance Flexibility

This is another benefits compliance of technology. Have a look back at the time when there were no electrical gadgets like phones and computers. Everything was just very slow and even misquoted. Information did not reach people at the right time.

But look at the world we live in today. Everything is so swift and accurate just like what is needed for the compliance programs. They are constantly changing and therefore people need to adopt real quick. The program ought to be scalable, changeable and flexible to help your employees get updated on any issues and also give them a chance to show their reaction.
As companies grow and open up new branches in other areas, they also need to extend their compliance programs to these new entities to ensure benefits compliance is achieved as you run the program. This pushes the companies to move the compliance technology from desktop and static storage to cloud-based interfaces that are also mobile-friendly.

3. Increase Efficiency

An efficient compliance program needs to have a backbone. These are the driving factors of the same. They are normally the controls, procedures, and policies. The ancient types of programs did not make things run efficiently but technology has really eased the compliance programs and made it an easy task for people.
It becomes easier to develop and upgrade that program, to refresh, review and even update it.

4. Improve Performance

A centralized type of compliance program is more efficient. In the old days, technology was not used as of now where business is keeping the program centralized and control from only one point. This definitely increases your team performance and the program as a whole.
Integrated platforms allow the teams in the organization to link their data together and get to know how a part of your program affects the other.

Technology Setbacks

The major downfall of technology is they are prone to attack. This is especially if we are talking about electronic gadgets such as computers. They can be attacked by harmful programs that will erase all that is stored on the computer.

These digital tools also use electricity for them to function. In case you do not have back-up generators to use when electricity is lost then the technology is useless at that instance.
Some believe technology have made humans become lazy. Since most of these tasks are being done by machines you find that if the technology fails to work then probably no work that day. Whereas it could just be a simple task but humans are now used to the machine so they feel they cannot do it. Others might believe that the machines do more work in one day than humans do in a month and does a better job. Either way, technology compliance benefits businesses.

We make the process simple. We are ERISA compliance specialists.

Phone: (515)-244-2424

E-Mail: info@bc2co.com

June 6, 2019 by BC2

ERISA Wrap Plan Document Preparers Are Available For Business

Before exploring the ERISA Wrap Plan Document Preparers, everyone should know about a few mandatory terms like “What is ERISA?”, “How it is associated with terms like Wrap Plan document?”, “Benefits of ERISA”, “Summary Plan Description”, “Summary of Material Modification (SMM) documents” etc. In this article, we will explore above-mentioned terms in detail. Let’s explore them one by one.

ERISA: ERISA is termed as the “Employee Retirement Income Security Act of 1974” implemented for United States employees. It creates minimum standards plans for employees working in private industry in terms of pension plans.

Plan Document: A plan document consists of all the benefits which will be given employees such as welfare and health benefits. It does not depend upon the company size, whether it’s small or big.

Every company is bound to manage a plan document for every employee. A plan document also consists of the overall term and condition of the plan prepared by the employer. It is not compulsory to write a plan document. If you don’t have a plan document in writing, then don’t worry. We can help.

Wrap Plan Document: A wrap plan document is similar to a plan document. But there is a minor difference in both of them i.e. A wrap plan document consists of every welfare and health benefits plan and wraps them all into one single plan document.

Wrap Document Preparation: ERISA allows all employee to claim their welfare benefit. For this, they must have a written plan document. Basic information about the plan is usually recognized by the written document.

Summary Plan Description (SPD): Summary plan Description usually known as SPD is a written document containing welfare benefit plan of an employee which every employer must have. Major aspects covered by the SPD are: Plan name, Plan number, Plan year, the Plan administrator, Detailed summary and description of benefits, Employer tax identification number (EIN), Benefit type, Plan sponsor, List and contact information of providers, Procedures for Qualified Medical Child Support Orders, Loss of benefits statement, USERRA rights, COBRA rights, Statement of ERISA rights, Claims and appeals procedures, Disclaimer and indemnification language, Affordable Care Act disclosures, Plan contribution information etc. Also, the participant must know about the benefits, claims, eligibility requirements, his/her rights etc. and every organization is bound to disclose all this information to the participant. For more information about SPD, contact us through call or email. You can get our contact information from the contact us section.

Summary of Material Modifications (SMM): Summary of Material Modifications usually known as SMM is particularly used by companies when a plan substantially affects the pricing and other key terms. The deadline for submitting Summary of Material Modifications (SMM) is 120 days. Within 120 days, companies should inform the participant about the changes or modifications in their plans. If a company does not submit Summary of Material Modifications (SMM) documents within 30 days after the participant requests it, then there is a penalty of/up to 110$ per day.

Some of the most famous Summary of Material Modifications (SMM) changes:

1. Modification in Coverage
2. Decrease or Removal of benefits payable

Why choose us for ERISA Wrap Plan Document Preparers: We are one of the leading and best in this industry. We have experienced professionals who will help you prepare your ERISA wrap plan document. Some of our services are:

• If you are in need of Assessment of your Plan Document, then you are at the right place. Just fill out your details in the contact form. Our representative will contact you within 24 hours.
• We also provide service like Complimentary review of current Plan documents. As it helps employees to know us better.
• Our experts are one of the best in creating document particularly when it comes Single or multiple benefit Plan Documents and Wrap Plan Documents.
• Summary Plan Descriptions (SPD) and Summary of Material Modifications (SMM) are the two key terms in ERISA wrap document. Contact us for more information.
• We also provide services like Educational presentations, Delivery of required materials, seminars and onsite training. Reach us by email or call.

Still can’t choose our services. Let’s connect over a phone call or email.