Correcting Compensation Errors in Defined Contribution Plans
  
One of the most confusing aspects of a plan document is the definition of compensation. In many cases, plan sponsors don't have a good understanding of how compensation is defined in their plan document or how the definition translates to the "real world" of their various payroll codes. In other cases, the plan document might be clear, but there is a lack of communication between those responsible for the plan document and the payroll staff that is making the contributions or generating census data. In all of these cases, there is the potential to run afoul of the requirement to operate your plan consistent with terms of the plan document. The IRS has published a brief overview of the most common errors they see and the steps for fixing the problems.

Compensation Errors in Defined Contribution Plans - Internal Revenue Services  


ERISA Plan Records Retention

In today's world of electronic files and reporting services, there can be a tendency to overlook strong records management practices because of a belief that we can always get access to the information we need. This is especially true for plan sponsors that might be accustomed to accessing plan reporting, filing information, or plan documents from their service provider. In the past year we have worked with a couple of sponsors that were impacted by a lack of strong plan records. In one case, a plan sponsor was being asked by the government to provide historical records of their plan document and in another a plan sponsor was trying to determine how to allocate a mutual fund settlement check that covered a period over 8 years ago. In each case, the plan sponsor had switched vendors, not an uncommon reality these days, and the resolution process was made more difficult by the lack of ready access to data held by the prior vendor. It is important to remember that records retention is ultimately the responsibility of the plan sponsor.

How Long to Retain ERISA Plan Records? Forever - Constangy Brooks & Smith, LLP

Conducting an RFP to Fulfill Fiduciary Responsibilities

With increased regulatory focus on plan fees, a common concern is how a plan sponsor can ensure that the fees they pay are reasonable for the services they are receiving. The retirement plan marketplace is highly dynamic, and when coupled with demographic changes at an employer, what was industry-leading fees or service 3 or 4 years ago might be out of line with where the market is today. The best way to ensure that the fees are reasonable and the services are best-in-class is to periodically conduct a vendor search Request for Proposal (RFP). Now a recent court case also seems to endorse that opinion. RFP processes are effective because they enable a plan sponsor to focus on their objectives, capture the attention of retirement plan vendors, and use competitive market factors to negotiate the best combination of services and fees that delivers exactly what the plan sponsor is trying to receive.

Case Suggests That RFPs May Be Necessary to Fulfill Fiduciary Duties - Wagner Law Group


Gina Gurgiolo, JD, LL.M, of the Multnomah Group will present our October webinar on "Conducting a Vendor Search: Benefits and Best Practices." You can find further information and register at http://info.multnomahgroup.com/20111020WebinarRegistrationLandingPage.html