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

retiremenet wrap compliance

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.

 

401k Benefits For Employees

401k Benefits For Employees – Building a Secure and Safe Financial Future

Saving money for future is one of the most vital things to do when you are employed. It’s not a simple task but it is a necessary one that will bear fruits when you reach your retirement age. A 401k plan is a tax qualified contribution based pension account into which a certain amount of money is put in from the employee and the employer. This amount will not be taxable as long as you don’t withdraw it prematurely. It is meant to be a retirement savings plan and therefore should not be touched ideally until you reach your retirement age.

What are some of the 401k Benefits for Employees?

1) Automatic Savings

In a 401k plan, the money will be deducted from your salary pre-tax and transferred into the 401k account every month. The most difficult part of saving money is in actually resisting the urge to spend all your money and this solves that problem very efficiently.

2) Tax Savings

Your contribution is taken before tax is levied and so your taxable income will be significantly less than what you would have to pay if you don’t have a 401k plan.

3) Better and Faster Savings

As your contributions grow without incurring any taxes, your savings can actually grow faster than a traditional investment plan in a brokerage firm or a bank.

4) Supplementing Social Security

Deciding when to draw social security is a difficult task in itself. When it is taken, you will often find that it falls quite short of the income you are used to when employed. A 401k plan can help you fill the gap better by giving you a good amount of money when you reach your retirement age.

5) Potential Loans

One of the most useful 401k benefits for employees is the ability to take loans based on special conditions for various reasons ranging from buying a house, medical expenses, education and so on. The amount of interest levied on these loans is usually lesser than traditional loans offered by banks.

Pre Mature Withdrawal of your 401k Savings

You can choose to withdraw your savings prematurely as a last resort if needed but you will have to incur penalties for doing so. If you are under the age of 59 , you might incur a 10 percent penalty along with paying taxes on the amount withdrawn which may end up being a substantial amount. The procedure for withdrawing the amount will depend on the employer as well as the type of withdrawal you go for. It is important to note that not all employers allow you to withdraw in advance. You will have to check with the H.R. department first to find out if such an option is available. A better way would be to take a loan out instead against your 401k savings as you will be able to get the amount you seek and pay it back at the same time.

If you have a 401k complaint or question, you can always contact the department of labor and file a claim on the EBSA website. Everything you need to know about the various procedures for doing so can be found there. Another place where you can find a lot of information pertaining to your retirement income is to learn more about the Employee Retirement Income Security Act (ERISA).

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.

erisa wrap document servicesUsually, 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?

  1. 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.
  2. 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.
  3. 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?

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How ERISA Compliance Works

Here is how ERISA Compliance works.

ERISA is a law that governs the operations of different retirement plans in the United States. The law also safeguards welfare benefit plans such as insurance plans for group life, dental, among others. By reading this article, you will get answers to a question such as “what is a wrap plan?”

The Department of Labor is mandated by the federal government to enforce ERISA. One of the primary objectives of the legal provision is to protect workers of different organizations from unfair actions and practices by various retirement plans and welfare programs.

Every employer is required to sensitize their employees about the options they have and how they can benefit from them. Every private institution in the country that offers retirement plans and health insurance benefits must adhere to ERISA. However, churches and all government bodies are exempted. Additionally, if you are self-employed or in a partnership and you do not have employees, you are not subject to ERISA guidelines.

The Main Sections of ERISA.

Every section of the legal provision has its relevant regulations, as explained below:

  • Disclosure.

Administrators of retirement plans are expected to provide any crucial information about a plan to their employees. The information should include details about types of coverage offered, levels available, and relevant reports. In some cases, the Department of Labor may ask the administrators to send the relevant documentation concerning employee programs. For example, an employer may be asked to send a document called a wrap plan which shows all their health and welfare plans.

  • Payment of Claims.

There must be a claims process for every welfare program offered by an organization and employers should inform their workers about it. An employer is required by the legal provision to provide a thorough explanation if any claim by an employee is denied.

  • Reporting.

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Other than providing the information requested by the Department of Labor, organizations must file documentation with information about welfare programs available for their workers and coverage types for each of them. The information is provided if an employer decides to increase or decrease the levels of coverage for their employees.

Classification of Benefit Plans.

Benefit plans organized by employers are divided into two main categories; welfare plans and retirement plans. Most employee welfare programs are required to adhere to guidelines of ERISA irrespective of their size.

Generally, the federal law applies to all group health plans that are funded by employers, including ones that are self and fully-insured. Benefits such as overtime payments and medical leave are also subject to the federal law.

ERISA provides guidelines that ensure that every employee gets the money that has accumulated in their accounts over their working life. It is not mandatory for employers are to have retirement plans for their workers. However, if they decide to have a plan, they must adhere to the minimum standards of the law.

Employers should ensure that their workers can easily access written information about their funds through regular mailing and hard copies. ERISA also requires organizations to explain to their workers how they can file claims for their retirement benefits with ease.

Employers should also diversify their investment portfolios to minimize the risk of loss and ensure that they will have the ability to pay out retirement benefits when due. An organization that complies with retirement plan guidelines set by the law should provide information about investments made and their returns to employees.

Now that you know how ERISA Compliance works let’s look at the…

Common Violations of ERISA.

A violation of the federal law refers to the failure by a party to meet their obligations. Some of the common violations include failure by some employers to offer benefits due to their employees and failure to observe the rights of workers covered by a benefit plan.

Action Taken against ERISA violators.

The federal law has two types of actions taken against violators; when a beneficiary of a plan files a complaint against a violator and when the Department of Labor takes action. Before a beneficiary files a lawsuit against a violator, they are required by the law to exhaust other administrative procedures.

There are civil and criminal punishments for violators of ERISA. Civil punishments include making payments, fines, or changing the provisions of a plan. The complainant receives any benefits that had been denied, interest accrued over time, and legal fees that they have incurred during a lawsuit.

On the other hand, criminal punishments include paying fines and violators may also face imprisonment. If an employer provides false documents about plan benefits, they may be required to pay a fine of up to $10,000.

 

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.

  1. 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.
  2. 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.
  3. 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:

  1. 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.
  2. Employers can easily explain the process required by participants to claim their benefits without any difficulty.
  3. Highly diversified plans that help minimize risks of financial loss during investment.
  4. 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.


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ERISA Law Requirement for Employee Benefit Plan Administration

ERISA Specifications for Employee Benefit Plan Administration

Administrative obligations have been imposed by the federal law Employee Retirement Income Security Act (ERISA) on employers having employee benefit programs. Employers who are providing employee welfare benefit programs like a retirement plan or health insurance plan are subject to the ERISA provisions. Being a federal law, ERISA covers all the administrative aspects of the retirement plans as well as benefits of the employee.

Even though the majority of your ERISA obligations are managed by your insurance company or benefits administrator, it is essential to ensure that you are acquainted with ERISA law requirement such that it will be feasible for you to assess whether the administrator is functioning properly.

What Benefits are covered by ERISA?

Under the Employee Retirement Income Security Act, a welfare program happens to be any program, plan, or even fund which is maintained by an employer for providing:

  • medicinal, hospital or surgical care
  • benefits for accident, illness, disability, or even demise
  • training programs and apprenticeship
  • unemployment advantages
  • scholarship funds
  • legal prepaid services
  • vacation benefits
  • retirement plans
  • daycare centers
  • severance or holiday pay

Administrative Provisions under ERISA

ERISA requires that the majority of the research in conforming to the ERISA is being done by the plan administrators such that there is no need for you to do much of anything unless, of course, you are functioning as your own supervisor. On many occasions, in case you do have a plan with any insurance firm out there, that company is going to function as the plan administrator while taking care of all these obligations as well. You will come across mainly 3 components to ERISA compliance:

  1. Reporting

It is required by ERISA that certain information returns are filed by the plan administrators with the Department of Labor and the IRS, which includes the description of a summary plan detailing the claims procedures in addition to coverage levels of your program. Plans must also be reported when alterations have been made to the plan.

  1. Disclosure

It is imperative for the ERISA that ERISA plan document and info are shared by the plan administrators with the participants of that plan upon request. A wide array of info can be made available to the plan participants including financial information as well as coverage levels.

  1. Paying claims

It is vital for every welfare program subject to ERISA to launch a claims procedure for processing petitions for benefits. Plans are intended to provide the participant with information when his or her claim has not been granted.

erisa law requirement

Requirements for welfare programs

If welfare programs subject to ERISA are offered by you and you likewise have an insurance agreement, your responsibility would be to allocate plan information to the employees, and this can be done easily as soon as the plan becomes effectual for the new hires.

Specifications for retirement plans

Retirement plans are actually subject to complicated specifications under ERISA which can have a strong impact on quite a few retirement program features including disclosure and reporting requirements as well as fiduciary responsibility too.

Forms Needed by ERISA

You will come across many forms which have to be completed for every single ERISA plan. In case you’re fortunate, your retirement plan administrator will be managing these on your behalf. It is essential to ensure that you’re absolutely certain which person is going to do what task.

IRS forms

It is imperative for the Welfare plans to file a yearly report with the IRS (Form 5500-SF or Form 5500).

In general, nevertheless, it is not essential to fill all of the other forms needed by the IRS for retirement programs. You will come across some rare instances where it might be imperative to fill other forms with the IRS; however, those circumstances won’t happen often whatsoever. It is the duty of your administrator to let you know in case you do experience such situations.

Labor forms Department

You will come across lots of forms which have to be filed by the welfare programs with the US Department of Labor. Luckily, the majority of them exclude small welfare programs.

Being a small establishment, the form which has to be filed by your administrator with the Department of Labor happens to be a financial statement which sets out the financial state of the plan. That obligation can be fulfilled by small employer programs by filing Form 5500-SF or Form 5500 along with attachments with the Department of Labor.


ERISA Law Requirement For Employee Benefit Plan Administration

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.

business is held together by compliance and its workersIt 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:

  1. 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)
  2. 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
  3. 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!

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Form 5500 Facts

What is Form 5500?

This is an annual report that your business needs to file with the Department of Labor (DOL) to report information about your 401(k) plan operations, investments, and financial conditions. In general, if you have a retirement plan such as the 401(k) and Profit-Sharing Plans, you need to file a Form 5500 every year you have the plan. The following are important Form 5500 Facts.

Who is Required to File the ERISA Form 5500?

Any sponsor of a plan that is subject to the Employee Retirement Income Security Act (ERISA) needs to complete Form 550. These may include:

1. Pension plans
2. Severance pay, life insurance, dental, or medical plans
3. Retirement arrangements
4. Annuity arrangements
5. Stock bonus, money purchase, 401(k), or profit-sharing plans

When Should it be Filed

The deadline for filing Form 5500 is the last day of the month after the seventh month following the end of the plan year. If your plan follows a calendar year plan, you have to file the form by July 31st. Nonetheless, you can always file Form 5558, which gets you an automatic two and half month extension. However, you have to file your Form 5558 before your Form 5500 deadline.

form 5500 facts and filing How to file Form 5500 Filed

Since January 1st, 2010 the US Department of Labor requires that you file your Form 5500 through the EFAST system on https://www.efast.dol.gov/welcome.html

The Different Plans Available

One Participant Plans

The one-participant plan applies to you if you are a business owner with no employees. However, the plan can cover you and your spouse.

If you are running a one-participant plan, you could either file a Form 5500-SF or the Form 5500-EZ. Form 5500-SF needs to be filed electronically while Form 5500-EZ needs to be filled in on paper and submitted to the IRS. In some instances, you may not have to file any 5500 form when you are operating under the one-participant plan. Generally, if the assets in your plan are no more than $250,000, you may be exempted from filing.Plans with less than 100 participants.

If your plan has less than 100 participants, you will need to file Form 5500-SF through EFAST.

Plans with 100 or more participants

If you have a plan that has 100 or more participants then you have to file Form 5500 electronically.

Penalties for Non-Compliance

There are stiff penalties for compliance that may include:

1. A fine of $10,000 or imprisonment for five years or both for any person that makes false representations or false statements, or knowingly conceals or fails to disclose any fact required by ERISA.
2. A fine of $2,063 for every day the sponsor refuses or fails to file an accurate or complete report.
3. Imprisonment of up to 10 years or a fine of $100,000 or both for knowingly violating the requirements of ERISA
4. A fine of $1,000 for failing to submit an actuarial statement according to the provisions.
5. A fine of $25 every day to a maximum of $15,000 for failing to file returns for bond purchase plans by the due date, annuities, and trusts, and certain plans of deferred compensation.

Retirement plans need to file Form 5500 every year to avoid heavy penalties. As a sponsor, it is very important to file Form 5500 on time and ensure the accuracy of the data reported to avoid stiff penalties. While it is not your typical tax return, the form is an important source of data by the DOL and the IRS for identifying what plans need an audit. The time spent reviewing that information will be time well spent. Overall, both the DOL, the IRS and you as the plan sponsor will benefit from having a well-operated employee benefit plan.


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Benefits Compliance Trends in 2019

We are past the midway point of the new year, with the job market experiencing a few adjustments concerning benefits. Given the advancement of the digital age and the need for organizations to cut down costs in every way possible, change is a constant expectation in the modern workplace. In particular, the following benefits compliance trends are catching on:

1) Revision of umbrella covers to personal packages
Employer-sponsored group coverage has long been the general rule of thumb for companies, but now organizations are switching to an alternative tactic. Employees instead propose individual plans as opposed to securing a blanket offer as has typically been the case. Moreover, with companies preferring the path of high-deductible health plans (HDHP), there’s also heightened attention on tax-advantaged health savings accounts or HSAs.

2) Telemedicine is becoming popular
The National Business Group on Health revealed findings pointing to rising healthcare costs, which are on their way to $15,000 per head. In an attempt to ensure prices don’t spiral out of control, healthcare providers are utilizing telemedicine to reduce in-person doctor visits, which are significantly more expensive. What’s more, insurers are encouraging consumers to seek out generic alternatives to costly prescription while they are also offering discount cards after negotiations with manufactures.

3) More comprehensive analysis
In previous years, employers broadly grouped workers in categories such as generation Z, X, and millennial’s with a view to targeted benefits offerings. However, there has been a change in terms of employee data tracking and recording. At the moment, employers are taking note of individual employee preferences while also keeping an eye on benefits usage. VOIs, anonymous surveys, and email-tracking are some of the new ways organizations are leveraging personal data to come up with smart solutions.

4) Emotional health is a top priority
Many employers have taken measures to safeguard the mental health of those under their payroll. Some companies, for instance, have opted for virtual and onsite counseling to combat mental, behavioral, and emotional complications such as addiction, anxiety, and stress. Alternatively, others are prioritizing network expansion while it’s becoming commonplace for mental health benefits and employee assistance programs to intertwine.

5) Employers’ benefits are becoming more family-friendly
Local and state regulations aside, it’s also in the interest of employers to improve or put in place paid-parent-leave plans with complimentary perks like paid caregiver leaves. Doing so proves necessary at a time when society is rife with changing expectations, and the fierce war for talent is only growing fiercer. The dwindling rates of unemployment have also seen to this with many companies striving to go the extra mile to prove more appealing. On the flip side, employees are also now taking a keener interest in benefits as opposed to salaries.

Companies have been shifting and stretching the goalposts of benefits compliance in 2019, and these five are some of the most significant changes. There’s still a long way to go until the end of the year, and you can be sure of more revisions in the coming months both from the insurer and the employer.


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Putting Humanity Into HR Compliance

Putting Humanity Into HR Compliance

What is HR? Why it is Criticized?

Human Resources is a term that came about in the 1960’s which describes the development and management of employees within an organization. Human Resources often is focused upon a range of goals from recruiting new staff, to benefits and general compensation, to training, employee relations, and general development of an organization. Human Resources key focus is working with people, yet it often can be thought of as an impersonal and more allied with the organization it is a part of than actual employee needs and desires. How can HR work to put the, “Humanity,” back in Human Resources and compliance with it.

Compliance and the Humanity Within HR

Don’t Make it Win-Lose

If an employee has a concern about something or someone they bring to the attention of HR, it should always be avoided making it a win-lose situation. The person reporting and the one being reported upon for compliance concerns should both be treated with respect and it made clear everyone loses when compliance is not met.” There just is a concern and it is being addressed in a professional and caring manner.

Focus on Employee Strengths

If the only thing employees ever hear from Human Resources is what they are doing wrong or their weaknesses in an organization they will become angry with HR and view it in a negative light. By having employees feel reassured and supported by a HR that compliments their compliance and skills, they will think of HR as a, “Resource,” just as the title, “Human Resources,” should impart.

Encourage Dialogue and Debate–When it is Appropriate

If there are policies and compliance concerns that employees want to discuss or debate, encourage that–where appropriate. As long as it is clear certain subjects are beyond consideration or alteration, employees should feel comfortable coming forward with ideas and suggestions about improvements to concerns that can be changed.

Be Approachable

If HR gives-off the appearance of being standoffish or only interested in causing employees to feel upset, no one will want to actually discuss compliance with HR. When employees think of Human Resources as having ample humanity and being an approachable entity, that will work wonders for optimization.

Above All Else Make it Clear HR is a Partner, Not a Critic

HR is there to help employees be the best they can, it is a partner. Coming-off instead as a critic eager to point-out flaws makes HR look like it only is present to discuss flaws. As listed above, don’t make it win-lose, focus on strengths, encourage dialogue/debate, be approachable, and otherwise make it abundantly clear HR is there to be a partner in making an organization succeed and in achieving optimal compliance, not a critic to be viewed with scorn.

Unending Process

Putting Humanity into HR Compliance is a process that does not ever end. It is a continuous process to make sure employees know HR is there to help them be their best, not an opponent or problem. As long as HR maintains its efforts to put, “Humanity,” into, Human Resources, it will always serve an organization quite well.