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April 14, 2016

Keep From Swimming in Retirement Plan Paperwork

The many documents and filing requirements by the IRS and Department of Labor can leave you overwhelmed and swimming in paperwork. Yet, as a retirement plan sponsor, you must keep nearly all plan records and information, past and present, in order to exercise your fiduciary responsibility and protect yourself from liability.

While some of the documentation regulations have been in place for some time, the 408(b)(2) Regulations that took effect in July 2012 have added yet another layer. These stipulations covering your fiduciary duty entail creating and keeping important documentation for selecting and monitoring plan service providers and evaluating plan fees.

It is never too late to get your retirement plan paperwork in order. Like many chores, the key is to create a manageable method for capturing and retaining the necessary documents and then staying on top of the process to avoid getting overwhelmed.

Regulations require you to keep a vast majority of your retirement plan documents for many years, some of them for several years even after a plan or participant termination. Your retirement plan records should include (but not be limited to) the following:

  • Plan Documents – Include all materials, such as the plan and trust documents and any amendments or attachments, the summary plan description and modifications, and investment policy statement
  • Plan Participant Communication – All print and electronic plan collateral, plus any notifications
  • Reports – All annual reports and trustee documentation, plus any corporate or board resolutions
  • Regulatory Filings – Form 5500 and any audited financial statements pertaining to the form
  • Participant Records – Include all 404(c) current and past documentation
  • Fidelity Bond Policy and Fiduciary Insurance Coverage
  • Service Provider Agreements – Documentation for all investment services, third-party consultants, recordkeepers and other service providers
  • Investment and Administrative Procedures and Meetings – All information regarding plan assets
  • Fiduciary Records – A list of all fiduciary roles and responsibilities along with responsible parties and all other fiduciary records

Having all your important plan fiduciary documents organized so you know where they are at a moment’s notice will give you peace of mind and save you time and money if your plan is ever audited by the DOL or IRS.

In addition, remember another responsibility for retirement plan fiduciaries under ERISA is to establish prudent processes for the creation and maintenance of an adequate records management system for all these important documents.

There are a variety of methods for creating or updating a secure filing system. You can use both paper and electronic recordkeeping, but be sure to include backup systems as well. For more help with this overwhelming but necessary requirement, contact Heffernan Financial Services today. Together, we can get the piles of paperwork manageable.

The opinions voiced in this material are for general information only and are not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or advisor for guidance on your specific situation.

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