Correction of Retirement Plan Failures

Discovering a plan failure that might jeopardize your retirement plan’s tax-qualified status or ultimately cause an examination of your plan is daunting enough. Fixing the problem may be even more overwhelming for a plan sponsor with the unwieldy and complex retirement plan rules of today.

ORBA’s professionals provide practical solutions to help you solve and correct the most basic to complex retirement plan failures. Our professionals bring the knowledge and expertise to correct your plan failures, whether it is a plan document, operational or reporting issue, and bring it back in compliance with IRS and DOL rules.

DOL and IRS Plan Examination Assistance

Surviving an IRS or DOL audit necessitates an understanding of the differences between the two. The IRS primarily has jurisdiction over the tax-qualified status of your employee benefit plans. This means that the IRS focuses on whether or not your plan is in compliance with the Internal Revenue Code. The DOL, on the other hand, is concerned with enforcement of rules under the Employee Retirement Income Security Act of 1974 (ERISA), which includes your plan’s fiduciary and disclosure compliance.

ORBA understands these differences, which are crucial to guiding an efficient and brief examination. Our professionals provide the support and expertise to optimally minimize the impact of an examination, whether the audit involves a retirement or health-related plan. ORBA will also help you get your plan back on track by assisting in getting your plan in complete compliance with IRS and DOL rules.

Nondiscrimination Testing

The Internal Revenue Service asks sponsors of retirement plans to comply with coverage and nondiscrimination testing to keep their plan’s tax-qualified status. Coverage and nondiscrimination tests are designed to ensure that retirement plans do not favor highly compensated and key employees in design and operation. For small businesses, complying with and passing the complex coverage and nondiscrimination testing rules is quite a task and may be very costly, especially if your plan frequently fails testing.

ORBA’s Employee Benefit Plans Group provides assistance and guidance in performing coverage and nondiscrimination tests based on our interpretation and understanding of these requirements. We can help you by preparing your tests along with suggestions on pass testing results that may ultimately save you money. With ORBA’s professional expertise, we will spotlight opportunities for improvement and help relieve you of the administrative burden of complying with these tests.

Fiduciary Responsibility

Administering a retirement plan and managing its assets requires certain actions and involves specific responsibilities. As plan sponsor of a retirement plan, such as a 401(k), ERISA considers you a “fiduciary” of your retirement plan. Fiduciaries have important responsibilities and are subject to standards of conduct because they act on behalf of participants in a retirement plan and their beneficiaries. With these fiduciary responsibilities, there is potential liability. Fiduciaries that do not follow the basic standards of conduct may be personally liable.

If you are lacking the expertise in operating your plan or do not have a documented process in decision making for the plan, consider hiring a knowledgeable expert to help. ORBA’s Employee Benefit Plans Group can evaluate whether or not you meet the fiduciary standards of conduct, assess your potential liability and provide needed solutions. We can help educate your current fiduciaries and develop processes to manage your plan in compliance with ERISA.

Plan Compliance

An employee benefit plan sponsor or administrator is ultimately responsible for ensuring that a company’s plan is in compliance with all of the requirements set forth by the Employee Retirement Income Security Act (ERISA), the Internal Revenue Service (IRS) and the U.S. Department of Labor (DOL). Compliance regulations of employee benefit plans are complex, extensive and, at times, difficult to interpret.  Plan sponsors are held accountable for all aspects of their plan, from remittances of contributions to when the plan is required to have an audit to the fiduciary responsibilities regarding selection and review of the plan’s investments. Making sure your plan is in compliance with all the rules and regulations can be quite overwhelming. ORBA’s Employee Benefit Plans Group is committed to staying informed on changes in laws and regulations that affect all types of plans.

At ORBA, our team of certified public accountants can assist plan sponsors on interpretations of the current rules and regulations, guide them on the best practices and, if applicable, assist in the best ways to prepare for your yearly audit. We provide a variety of services from audits, preparation of the plan’s 5500 tax return, and consulting, to ensure your plan is in compliance with the most recent rules and regulations put out by the IRS and DOL.

Calculating Lost Earnings

There are many rules and regulations plan sponsors must follow when operating a benefit plan. Mistakes are going to happen. ORBA can help guide you through the complexities of correcting any operational errors you may encounter.

One common correction involves calculating lost earnings on contributions that were not properly remitted into the plan or were not remitted on a timely basis. ORBA has helped many calculate these lost earnings as well as walk plan sponsors through the necessary steps to file and report the correction to the proper regulators.

If you find your plan is in need of correcting operational failures regarding missed or untimely contributions, ORBA’s Employee Benefit Plans Group can help calculate the lost earnings and ensure that error is corrected in a timely and efficient manner.