Deposit Employee Withholdings Immediately
The Department of Labor (DOL) rules state that employee deferrals and loan repayments must be deposited as soon as the amounts can be separated from the employer’s general assets. Recent investigations and rulings show that the DOL believes most employers can remit deferrals to the plan within 2 to 5 days after each payroll cycle. For this reason, RPA recommends that all employee withholdings be remitted within two to five business days after each payroll cycle.
Employee Withholding From Bonuses or Irregular Pay
You must withhold employee deferrals from bonus and other irregular pay unless you specifically requested that the plan document not permit withholding. The Plan Administrator (client) is permitted to allow special deferral elections, such as when a bonus or other irregular pay is being paid, where the employee could elect a higher withholding or no withholding at all.
Notify Us of Certain Changes
Acquiring another company? One of the plan's trustees is no longer associated with the company? Company ownership is changing? Please make sure you let us know ahead of time before events occur that could have an effect on the retirement plan.
Maintain A Fidelity Bond
A Fidelity Bond protects the plan assets against fraud. Regulations require a plan to have a Fidelity Bond for no less than 10% of the plan assets. Not having a Fidelity Bond can subject even the smallest of plans to a costly annual audit. A Fidelity Bond can be obtained through your property insurance provider and should cost between $200 and $500 per year. You can also go to https://quote.colonialsurety.com/erisa_quote/?ref=VA0114 to obtain a Fidelity Bond. A Fiduciary Bond is not required.
Distribute the Summary Plan Description
You must provide a copy of the Summary Plan Description (SPD) to newly eligible participants 30 days prior to their entry into the plan.
Automatically Enroll Newly Eligible Employees
Most new 401(k) and 403(b) plan require you to automatically enroll employees who become eligible if they do not otherwise make a deferral election. While we encourage most new clients to automatically enroll at 10%, if your plan starts with a lower percentage you will need to annually increase automatically enrolled participants by 1% each year up to 10%.
Distribute Safe Harbor and/or Auto-Enrollment Notices
If your plan is utilizing Safe Harbor Contributions to avoid certain tests, or if your plan has automatic enrollment, you must hand out a Notice to participants 30 days before the beginning of your plan year. RPA will provide this notice each year.
Distribute the Matching Contribution Confirmation Notice (if applicable)
If you make a discretionary matching contribution (not a safe harbor match) in any plan year, you will need to distribute a matching contribution confirmation notice within 60 days following the deposit of the final matching contribution for the plan year. RPA will provide you a sample notice each year.
Distribute the Qualified Default Investment Alternative (QDIA) Notice
If your plan is utilizing a Qualified Default Investment Alternative as the default fund(s) for contributions when a participant did not complete an enrollment form, you must hand out a Notice to the Participant within 30 days of the initial contribution. You must also distribute an annual notice to participants who remain default invested. QDIA funds are typically a Target Date Series of funds. Please consult with your plan’s investment advisor or custodian for additional information and to obtain the notice.
Maintain Participant Enrollment and Beneficiary Forms
If a newly eligible employee does not wish to make deferrals to the plan, you are required to get an enrollment form signed indicating the election not to participate, or evidence that information on the plan was provided to the employee. You, the Plan Sponsor and Plan Administrator, are responsible for maintaining beneficiary designations.
Help Your Non-English Speaking Participants
If you have a significant number of participants who are literate only in the same non-English language, you must attach a notice in that language to your Plan communications, such as the SPD, that assistance is available in their language. This notice must contain the name and phone number of the contact person in your office where they can receive further assistance.
Allow Your Long-Term Part-Time Employees to Contribute
A Long-Term Part-Time (LTPT) employee is someone who worked between 500 and 1000 hours a plan year for at least two consecutive years, and never became eligible to participate in the plan. LTPT employees must be given the opportunity to contribute employee deferrals in their employer's 401(k) plan, including being subject to automatic enrollment rules. Years prior to 2021 are excluded from this three‐year determination.
Loan Repayments
Loan repayments are made with after-tax dollars.
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