Kurt Vonnegut Jr. wrote in Hocus Pocus that “everybody wants to build, and nobody wants to do maintenance.”
Never were truer words spoken. When it comes to our services, we do a lot of designing and creating. We also do a tremendous amount of keeping our creations on track financially and with an eye to compliance. Perhaps one of the most rewarding things we do is to take on broken retirement plans and get them back into working order. Kind of a rescue mission. That is no small task, since usually they are out of compliance and are “in the weeds” in terms of staying on track to meet the employer’s original objectives.
A retirement plan can get in trouble in a number of ways.
- Loss of a key advisor
- Inability of the employer to finance the plan
- Inattentiveness of employer and/or third party administrator
Ultimately, the employer is responsible for keeping the plan in compliance. Accountable to whom? Certainly to the owners of the business and the employees who are in the plan. But there also are three key government agencies: the Internal Revenue Service, the Department of Labor, and (for certain plans) the Pension Benefit Guaranty Corporation.
The most common problems seem to be in the areas of:
- Tax returns
- Plan document
When we begin to repair a broken plan, we look to these items. We also consider which government agencies need to know of the infractions, and we determine if the issue can be resolved through the IRS Voluntary Corrections Program. It is always better to repair a problem than to ignore it. And that can mean paying a fine. However, if the issue is discovered on audit the fine almost always will be much greater.
We can assist you in two ways. First, if you know your plan is out of compliance, contact us to discuss the issue. Second, if you are uncertain about this issue, contact us for a confidential compliance check-up.