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Employers, plan sponsors, and Trustee(s) are typically unaware of their obligations and responsibilities as plan fiduciaries. Some believe they are performing all the required duties. Others mistakenly believe that insurance companies, investment representatives, and third party administrative firms are performing such fiduciary tasks. Each, however, specifically disclaims a fiduciary role with regard to retirement plans. Based upon recent plan audit statistics, an estimated 65% of retirement plans audited were fined, received penalties, or had to make reimbursements for errors. The DOL expects this figure will rise as the agency has added nearly 1,000 employees, most of them assigned to enforce compliance among plan sponsors. This means more plans will face scrutiny going forward.
According to the DOL, a majority of plan failures occur because plan sponsors fail to follow their plan document provisions; discriminate against rank-and-file employees; fail to meet minimum employee coverage requirements; or establish a plan for which their businesses do not qualify. Plan sponsors also fail to deposit participant contributions to the plans in a timely manner; miscalculate matching contributions; file their 5500 forms late or not at all; or fail to ensure that participant loans and hardship distributions comply with plan provisions. Such information should cause plan fiduciaries to consider seeking professional advice from service providers that provide fiduciary services within the DOL prescribed regulations. For additional information on audit findings, see: http://www.dol.gov/ebsa/newsroom/fsFYagencyresults.htmlThe FMS “Benchmarking” program can help employers, plan sponsors, and Trustees avoid the problems typically discovered in the audit process. We review, compare, and value plan fees, record keeping and administrative services, and investment provider services using independent quantitative and qualitative analysis through the Fiduciary Benchmarks Insights, LLC (FBi) database. We also evaluate the costs and performance of the funds offered as investment options to participants utilizing fi360, the industry leader in providing analytic data to fiduciaries The services we provide from FBi and fi360 can help you validate a decision to remain with your current providers or provide impetus to look for alternatives. Even if a search is not your intention, allow us to conduct a “Benchmarking” evaluation to ensure your compliance with ERISA requirement and reduce your risk in the event of a plan audit. Contact us at firstname.lastname@example.org for additional information.
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