401K Plan Compliance & Evaluation Services

Conducting an annual plan compliance review for a 401(k) plan is critical for several reasons:
Regulatory Compliance: Ensures the plan adheres to IRS and Department of Labor (DOL) regulations, including ERISA requirements. Non-compliance can lead to penalties, fines, or plan disqualification.

Plan Document Accuracy: Verifies that the plan document aligns with current laws and reflects any amendments. This prevents operational errors that could violate plan terms.

Operational Integrity: Identifies and corrects errors in contributions, vesting, or distributions. For example, it ensures employee deferrals and employer matches are calculated correctly and deposited timely.

Fiduciary Duty: Demonstrates that plan fiduciaries are fulfilling their duty to act in participants' best interests. Regular reviews help monitor investment options, fees, and service providers.

Nondiscrimination Testing: Confirms the plan passes annual nondiscrimination tests (e.g., ADP/ACP tests) to ensure it doesn’t disproportionately favor highly compensated employees.

Participant Protection: Safeguards employees’ retirement savings by ensuring proper administration, accurate recordkeeping, and timely participant disclosures (e.g., fee notices, summary plan descriptions).

Risk Mitigation: Proactively addresses issues before they escalate into costly audits or litigation. Early detection of errors allows for corrections under IRS or DOL voluntary compliance programs.

Plan Improvements: Identifies opportunities to enhance the plan, such as updating investment options, reducing fees, or improving participant education.
Regular reviews maintain the plan’s tax-qualified status, protect participants, and reduce legal and financial risks for the employer.
Explain nondiscrimination testing

Employee benefits regulations