A retirement plan is only as valuable as its continuity. That’s a truism. While the market fluctuates; employees come and go; regulations change; targets are adjusted . . . management and participants have a right to expect the retirement plan to be a water-tight ship in a churning sea of variables.
That’s why yearly check-ups are critical– to catch problems before they affect performance; to avoid costly errors; to ensure that the program is performing according to expectations.
At PSI, our administration department assumes responsibility for ensuring that the client’s cargo (plan) is kept viable and valuable while conditions shift and change.
Our annual review services include:
- Making sure that the Actual Deferral and Actual Contribution Percentages (ADP & ACP) are on target
- Screening to make sure the plan is in compliance with non-discrimination laws
- Checking annual and estimated contributions
- Issuing and filing the proper forms (such as 5500 and 480.70)
- Plan termination and liquidation when the time comes
All retirement plans require a fair amount of reporting. Much of it is accounting-related or legal/regulatory. PSI has on staff attorneys, accountants and actuaries familiar with the terrain.
This makes it possible for us to quickly detect areas where the plan could go awry, in spite of the best intentions of management.
Here are a few errors the IRS lists among the most common:
- eligible employees are not covered
- employees do not have adequate or required information
- employee deferrals are not deposited on a timely basis
- employer contributions are not deposited on a timely basis
- the plan’s original terms are not followed
- limits on deferrals and contributions have been exceeded
Adjustments are a fact of life. Sometimes it’s the routine details that somehow escape attention. The IRS advises plan sponsors that third-party administrators can sometimes provide the outside eye that’s most apt to detect an oversight or flaw.
Retirement plans can roll on for years without a hitch and then suddenly encounter a snag. The fiduciary responsibility of a plan administrator is heavily weighted towards day-to-day operations. Annual reviews give everyone an opportunity to step back and consider the big picture.
At PSI, we have analytical tools for the annual checkup that correspond to the physician’s stethoscope, blood-pressure monitor, and thermometer. While these may not be in everyone’s toolbox, they are an important component of what we do at PSI.
At PSI, we make it easier to run the numbers, one year at a time. Is it time for the annual check-up?