Benefit Plan Compliance Alert 2014: Are You Ready?
It’s that time of year: falling temperatures, school breaks, and holiday celebrations. With each of these dominating our winter season each year and competing for our attention, it is important to take a few moments to remember some compliance deadlines which are pending in the next few months. Once we’ve planned for these important dates, we can get back to enjoying all that the winter season has to offer (except that whole temperature thing, of course.)
All deadlines below assume a calendar plan year-end:
First Quarter 2014: Helpful Hints to Navigate
- January 31: Is your retirement plan a custom document? If so, when did you last apply for a determination letter from the IRS. It may have already been 5 years! We advise that you contact your ERISA counsel and discuss what may be required of you:
- Action Item: If your organization’s Employer Identification Number (EIN) ends in 3 or 8, you are required to file for a new determination letter from the IRS by January 31, 2014.
- March 15: If your plan is subject to non-discrimination (ADP/ACP) testing (i.e. not safe-harbor), any refunds due to participants to bring the plan into compliance with this testing must be remitted to affected participants by this date to avoid a 10% excise tax to the employer.
- Tips on Discrimination Testing
- Work with your Third Party Administrator (TPA) to establish a previously agreed-upon time frame for delivery of all compliance testing results to ensure that you have enough time to resolve any issues and process any refunds due to participants by the March 15 deadline.
- Review census file for proper classification of employees as highly compensated employees (HCEs) and non-highly compensated employees (NHCEs).
- Review definition of compensation to ensure that the compensation used in the test is the correct definition of compensation.
- Verify data to payroll records prior to submitting to ensure that all data is properly stated prior to the tests are completed.
- Monitor the contributions of highly compensated employees throughout the year and perform an adp/acp test midway through the year to ensure that you will pass.
- Consider increasing participation through automatic enrollment and additional education to employees.
- Enact a safe-harbor contribution so as to avoid ADP/ACP testing altogether.
Keep an eye on Meaden & Moore’s blog for future compliance deadline updates as we move throughout 2014!
With over 20 years in public practice, Brian has extensive audit experience with a specialty focus in audits of employee benefit plans (EBP). He has a thorough and deep understanding of the operations and compliance aspects of many types of EBPs, providing him with the ability to consult, guide, and advise clients on best practices and opportunities to improve plan processes and to protect fiduciary liability. Brian continues to develop his EBP audit expertise through regular attendance at conferences sponsored by the American Institute of Certified Public Accountants (AICPA) and other continuing education opportunities throughout the year. He approaches each engagement as a business partner of his clients and has the necessary skills and knowledge to provide them with best-case solutions.
