Recently, ADKF has joined with Cross Financial Group to offer a seminar to some of our clients regarding Employee Benefit Plans and pitfalls to avoid when you’re the Plan Sponsor. Dan Clark of Cross Financial Group also wrote the follow blog post to share with our clients and readers. A big Thank You to Dan and Cross Financial Group for all of their hard work in helping us to educate our clients. Tips to manager your Fiduciary Responsibility As more and more ERISA lawsuits are making headlines, 401(k) Plan Trustees must be aware of their fiduciary requirements under ERISA and take action to ensure they are compliant with regulations. While it is rare for the Department of Labor to issue specific guidelines in managing a Plan, the best practice for Trustees to remain compliant is to implement a combination of industry regulations and best practices. The following 3 practices are intended to help Plan Trustees manage their fiduciary responsibilities and liability in today’s legislative environment.
- Act solely in the best interest of plan participants. As fiduciaries, it is requirement to follow Plan documents, avoid conflicts of interest, and act prudently on behalf of Plan participants and their beneficiaries.
- Pay only reasonable fee and plan expenses. On an annual basis Plan Trustees should review all 408(b)(2) disclosures from each covered service provider and use these as a basis to benchmark Plan costs. In addition, it is a best practice to perform a provider search every 3 years to determine if the needs of the Plan and participants can be met with at lower costs for an equivalent or a higher level of service.
- Remit contributions timely. As a general rule, participant contributions must be deposited into the participants trust account on the earliest date they can reasonable be segregated from corporate assets. This is generally 7 business days. It is important to note that failing to remit contributions timely can cause a Plan to enter the Voluntary Fiduciary Correction Program (VFCP) which can trigger a Plan audit by the Department of Labor.
Through establishing, implementing and documenting a prudent fiduciary process, Plan Trustees will prepare to be compliant in an ever increasing regulatory environment. Dan Clark of Cross Financial Services contributed to this article. Securities Offered Through United Planners Financial Services Of America Member: FINRA/SIPC. Investment Advisory Services Offered Through Cross Financial Services. Cross Financial Services and United Planners Are Independent Companies.