Inherent in any successful benefits strategy is awareness and action regarding the regulatory environment surrounding your employer-sponsored plans. Below, we have compiled a few reminders of upcoming regulatory deadlines:
All deadlines below assume a calendar plan year-end:
First Quarter 2019 (and beyond): Helpful Hints to Navigate
February 14: The Department of Labor’s regulations on fee disclosure include a requirement to issue certain disclosures to participants/beneficiaries by 45 days after each quarter-end for participant-directed DC plans.
o This disclosure is required for all participants with an account balance as of the end of the quarter.
o It is likely that your TPA handles this quarterly disclosure for you. However, this is a good opportunity to monitor the process in place at your TPA to ensure that these disclosures are being mailed out to participants in a timely manner.
Note: The DOL is continuing their scrutiny of compliance with these regulations and your fiduciary responsibility does not stop at assigning this task to your TPA, so be sure to maintain due diligence with this process!
March 15: If your organization is structured as an S-Corporation or a partnership, employer contributions are due to retirement plan’s trust in order for the organization to deduct on its tax return (assuming no extension of the organization’s tax return).
March 15: If your plan is subject to non-discrimination (ADP/ACP) testing (i.e. not safe-harbor), any refunds due to participants to bring the plan into compliance with this testing must be remitted to affected (highly-compensated) participants by this date to avoid a 10% excise tax on the employer.
o If you have an eligible automatic contribution arrangement (EACA): the deadline is July 1 this year.
o Tips on Discrimination Testing:
- Work with your TPA to establish a previously agreed-upon time frame for delivery of all compliance testing results to ensure that you have enough time to resolve any issues and process any refunds due to participants by the March 15 deadline.
- Review census file for proper classification of HCEs vs. NHCEs.
- Consider changing your testing method from current year to prior year:
This allows you to utilize compensation and deferral data from the previous year which can help avoid waiting until the end of the current year to have the tests run which helps to minimize getting close to the March 15 deadline.
Using prior year data can help in establishing a limit of elective deferrals for HCEs in “real time” so as to help identify potential failures before the end of the year.
- Increase participation among NHCEs via automatic enrollment.
- Enact a safe-harbor contribution so as to avoid ADP/ACP testing altogether.
April 15: If your organization is structured as an C-Corporation, employer contributions are due to retirement plan’s trust in order for the organization to deduct on its tax return (assuming no extension of the organization’s tax return).
April 30: Annual Funding Notice due to participants of defined benefit (DB) pension plans.