- Tax Qualified Plans
- Plan document:
- Required amendments
- 401(k) and 403(b) plans – Amendments to comply with the IRS final hardship distribution regulations must be adopted by December 31, 2021 (regardless of plan year end)
- Defined benefit pension plans – Those that include the mortality table for determining lump sum values (as opposed to incorporating the tables by reference) must be amended with an updated table by December 31, 2021
- Discretionary amendments
- Amendments for any discretionary changes made to a plan during the plan year must be adopted by the last day of the plan year
- Summary plan description
- Review, update for any relevant changes made to the plan and ensure that all participants have a copy of the most recent version
- Reporting and notices:
- Submit Form 5500 Annual Return/Report
- Due on the last day of the seventh month after the plan year ends (July 31 for calendar year plans)
- 2½ -month extension (until October 15 for calendar year plans) available by submitting a Form 5558 before the Form 5500 due date
- Audited financial statements must be submitted with Form 5500 for retirement plans with more than 100 employees participating in the plan
- Distribute Summary Annual Report
- Annual notice must be distributed to plan participants at least 30 days and not more than 90 days before the start of a plan year for defined contribution and 403(b) plans that:
- rely on a safe harbor design (safe harbor matching contributions or qualified nonelective contributions) to satisfy nondiscrimination requirements,
- provide for automatic enrollment with or without a safe harbor design, and/or
- use a qualified default investment alternative (QDIA) for participants who do not make investment elections.
- Submit Form 5500 Annual Return/Report
- Required amendments
- Plan operations:
- Contributions must be made timely and in accordance with the terms of the plan,
- Employee elective deferral contributions (g. 401(k) and 403(b) contributions) must be made as soon as administratively practicable
- Nondiscrimination tests must be accurately performed, including, if applicable, controlled group testing
- Ensure compliance with plan eligibility requirements
- Ensure compliance with plan vesting requirements
- Required Minimum Distributions
- The Coronavirus Aid, Relief, and Economic Security (CARES) Act allowed plan sponsors to suspend required minimum distributions payable in 2020. There is no similar relief for 2021. Required minimum distributions for 2021 must be paid no later than December 31, 2021, or by April 1, 2022, for initial required minimum distributions. Also, the Setting Every Community Up for Retirement Enhancement (SECURE) Act changed the required beginning date to age 72 for participants who had not attained age 70-1/2 by December 31, 2019.
- Plan investments and fiduciary concerns:
- Review investment option performance
- Document how plan investment choices are determined, modified and monitored
- Review investment option fees for reasonableness (direct and indirect compensation, including revenue sharing)
- Identify plan fiduciaries (g., investment advisors and recordkeepers)
- Fiduciary status should be acknowledged writing
- Ensure that all fiduciaries appropriately bonded and have fiduciary liability insurance when necessary
- Document any individuals or entities indemnified by the plan sponsor for actions taken as a plan fiduciary
- ERISA fidelity bond must be in place for all plans and must be sufficient
- Determine if an RFP for plan administration, investment, accounting, and recordkeeping services is appropriate
- Comply with ERISA fee disclosure requirements:
- Fees that must be disclosed: Administrative and individual expenses that may be charged against an individual’s account and investment-related information for the plan’s designated investment alternatives
- Timing: Prior to when an individual may first provide investment direction and annually thereafter (quarterly for some fees charged directly to participant accounts)
- Review investment option performance
- Welfare Benefit Plans
- Plan documents:
- ERISA-compliant welfare benefit or wrap plan document
- ERISA-compliant summary plan description
- Self-insured welfare benefit plans must be in writing
- Code Section 125, flexible spending account, dependent care assistance and other cafeteria plans must be in writing
- Reporting and notifications:
- Where applicable, Medicare Part D notifications for prescription drugs and potential federal subsidies
- Form 5500 for plans with more than 100 eligible employees participating in the plan
- COBRA Notices must be compliant and properly distributed
- Ensure open enrollment forms are compliant
- Affordable Care Act (“ACA”) concerns
- For “applicable large employers” (“ALEs”), ensure compliance with ACA employer shared responsibility requirement to provide “affordable” coverage that has “minimum value”
- Reporting group health coverage for ALEs (IRS Forms 1094-C and 1095-C)
- Comply with ACA requirements for internal claims and appeals and external review processes