Have the retirement plans you work with had a checkup in the last year? If not, the IRS says one could be overdue. For example, the IRS asks:
- Has the plan document been updated within the past few years to reflect recent law changes?
- Is the plan being operated in accordance with the terms of the plan document?
- Are all eligible employees participating in the plan?
The IRS says that such checkups can uncover the following common mistakes:
- Not covering the proper employees
- Not giving employees required information
- Not depositing employee deferrals timely
- Not depositing employer contributions timely
- Not limiting employee deferrals and employer contributions to the proper maximum limits
To help, the IRS has provided a series of one-page checklists that can be useful conversation starters with plan sponsor clients and prospects. The IRS has also made available free “fix-it guides” with tips on how to find, fix and avoid potential errors with:
- SIMPLE IRAs
- SEPs
- SARSEPs
- 401(k) plans
- 403(b) plans
The IRS cautions that these checklists are for use on a voluntary basis, and should not be filed with the IRS. Also, remember that the checklists aren’t meant as a comprehensive review of every aspect of a plan — just an easy way to start.
More information is available here.
