The Plan Sponsor’s Guide to Managing a 401(k)
What should you be doing at
each stage of the plan lifecycle?
As a benefit plan sponsor, top of mind should be the responsibilities you have to your participants. Are you managing the plan and its assets appropriately? Are you making decisions in participants’ best interests? These are just some of the core fiduciary responsibilities [KM1] you hold to the plan.
Unfortunately, it can be difficult to know how these tenets are applied in practice. This checklist can help you know what actions to take at each stage of your plan’s lifecycle to ensure you’re managing your plan effectively and meeting your fiduciary responsibilities.
When you establish the plan… |
Yes |
No |
N/A |
|
Have you defined the plan’s features? |
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Eligibility requirements |
☐ |
☐ |
|
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Automatic enrollment and escalation features
|
☐ |
☐ |
☐ |
|
Vesting schedules |
☐ |
☐ |
|
|
Employer contribution provisions
|
☐ |
☐ |
☐ |
|
Loan provisions |
☐ |
☐ |
☐ |
|
Roth deferral provisions |
☐ |
☐ |
☐ |
|
Catch-up contributions provisions |
☐ |
☐ |
☐ |
|
In-service distribution provisions
|
☐ |
☐ |
☐ |
|
Have you established its legal and governance structures? |
|
|
|
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Have you adopted a plan document? |
☐ |
☐ |
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Have you established a trust? |
☐ |
☐ |
|
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Have you identified the trustee? |
☐ |
☐ |
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Have you identified your plan’s named fiduciary?
|
☐ |
☐ |
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Have you selected appropriate service providers through a documented, prudent process? |
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|
|
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Recordkeeper |
☐ |
☐ |
☐ |
|
Third-party administrator (TPA) |
☐ |
☐ |
☐ |
|
Investment adviser |
☐ |
☐ |
☐ |
|
Investment provider/platform |
☐ |
☐ |
☐ |
|
Have you evaluated potential conflicts of interest with investment selections and chosen service providers? |
☐ |
☐ |
|
|
Have you established and documented administrative processes? |
☐ |
☐ |
|
When employees join or become eligible for the plan… |
Yes |
No |
N/A |
|
Have newly eligible employees been notified of their eligibility and the options available to them?
|
☐ |
☐ |
|
|
Have automatic enrollment features been implemented appropriately? |
☐ |
☐ |
☐ |
|
Have you provided new participants with resources to help them make informed decisions? |
☐ |
☐ |
☐ |
As contributions are made… |
Yes |
No |
N/A |
|
Does your payroll processor correctly classify compensation eligible for deferral? |
☐ |
☐ |
|
|
Are employee deferrals being calculated correctly? |
☐ |
☐ |
|
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Are employee deferrals categorized appropriately between Roth, catch-up, and after-tax? |
☐ |
☐ |
|
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Are employer contributions being applied appropriately and according to plan documents? |
☐ |
☐ |
☐ |
|
Are contributions monitored to ensure they remain within IRS-imposed limits?
|
☐ |
☐ |
|
|
Are true-up contributions calculated correctly?
|
☐ |
☐ |
☐ |
|
Are prior-year employer contributions made by the appropriate deadline? |
☐ |
☐ |
☐ |
|
Are employee deferrals and employer contributions being deposited into the trust timely?
|
☐ |
☐ |
|
As distributions are made… |
Yes |
No |
N/A |
|
Are distribution requests reviewed for eligibility?
|
☐ |
☐ |
|
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Are distributions made in a form permitted by the plan?
|
☐ |
☐ |
|
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Are rollover requests being handled appropriately? |
☐ |
☐ |
|
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Are vested account balances verified before distribution requests are approved? |
☐ |
☐ |
|
|
Are required minimum distributions (RMDs) identified and calculated correctly? |
☐ |
☐ |
|
|
Are they being distributed timely? |
☐ |
☐ |
|
|
Are spousal consents collected?
|
☐ |
☐ |
|
|
In the event of the participant’s death, are distributions being handled appropriately?
|
☐ |
☐ |
|
When you change the plan… |
Yes |
No |
N/A |
|
Does the change require a plan amendment? |
☐ |
☐ |
|
|
Have you communicated the change to participants? |
☐ |
☐ |
|
|
Have you notified your TPA, recordkeeper, and payroll department of the change? |
☐ |
☐ |
|
|
Have you determined whether the change affects any existing processes or procedures?
|
☐ |
☐ |
|
When something goes wrong… |
Yes |
No |
N/A |
|
Have you identified an error in how you’ve been administering the plan? |
☐ |
☐ |
|
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Have you determined who was affected and how? |
☐ |
☐ |
|
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Have affected participants been notified? |
☐ |
☐ |
|
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Have you followed the appropriate procedures to correct the error? |
☐ |
☐ |
|
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Have you documented the error and your correction of it? |
☐ |
☐ |
|
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Have you identified how the error occurred and taken steps to prevent it in the future? |
☐ |
☐ |
|
When you’re reviewing the plan… |
Yes |
No |
N/A |
|
Have you established an appropriate structure for overseeing the plan?
Though not required, oversight committees can fulfill many of the fiduciary duties required to run your plan. |
☐ |
☐ |
☐ |
|
In the past year, have you performed the following plan oversight tasks? |
|
|
|
|
Reviewed that your plan is operating in accordance with plan documents? |
☐ |
☐ |
|
|
Considered new laws and regulations that could impact your plan? |
☐ |
☐ |
|
|
Performed required nondiscrimination testing? |
☐ |
☐ |
|
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Considered whether your plan’s investment options provide adequate diversification? |
☐ |
☐ |
|
|
Reviewed that fees and expenses are reasonable?
|
☐ |
☐ |
|
|
Reviewed the performance, fees, and cybersecurity practices of your service providers?
Reviewing SOC 1 reports are a great place to start. |
☐ |
☐ |
|
|
Reviewed whether forfeitures are being used in accordance with the plan document? |
☐ |
☐ |
|
|
Considered participant concerns and feedback? |
☐ |
☐ |
☐ |
|
Performed a fraud risk analysis? |
☐ |
☐ |
☐ |
|
Documented these decisions and your reasoning behind them? |
☐ |
☐ |
|
|
In the past year, have you performed the following compliance tasks? |
|
|
|
|
Reviewed participant count?
|
☐ |
☐ |
|
|
Filed Form 5500? |
☐ |
☐ |
|
|
Commissioned an independent audit?
|
☐ |
☐ |
☐ |
Tyler is a Senior Manager in Meaden & Moore’s Assurance Services Group with over three years of experience in public accounting. He coordinates and oversees daily fieldwork, prepares financial statements and executes various other aspects of the assurance engagement. Tyler works with a wide variety of clients in various industries including service, manufacturing, retail and construction. Tyler works with many Not-for-Profit organizations performing attestation services. In addition, he also conducts audits of 401(k) plans, pension, and health and welfare plans.
