Compliance oversight is one of the most critical aspects of fiduciary duty. Fiduciaries of ERISA plans are legally responsible for ensuring the organization’s retirement plan operates in accordance with ERISA and IRS regulations. That responsibility extends beyond investment performance and governance to the day-to-day operations that keep your plan compliant.
Even small errors can pose significant risks, and conducting a structured fiduciary plan review can help identify and resolve compliance issues before they become liabilities.
Why Compliance Matters in Retirement Plans
Employee Retirement Income Security Act (ERISA) and IRS rules require retirement plans to follow strict operational and reporting standards. From contribution limits to distributions and vesting, every component must be handled accurately and in a timely manner.
A structured compliance process can help:
- Protect tax benefits
- Maintain participant trust
- Prevent costly regulatory penalties
- Demonstrate prudent fiduciary oversight
Risks of Noncompliance to Plan Health
Neglecting plan compliance can have a wide range of negative impacts, including:
Regulatory penalties
Missing deadlines for required filings or notices can lead to audits or fines.
Operational errors
Incorrect processing of loans, withdrawals, or eligibility may result in costly corrections or participant dissatisfaction.
Fraud exposure
Failing to maintain the ERISA-required fidelity bond coverage can leave plan assets vulnerable to fraud.
Erosion of trust
Overlooking required participant disclosures can damage credibility with employees and impact engagement.
The CBIZ Prescription for Success
To strengthen compliance and help reduce fiduciary risk, plan sponsors may wish to consider the following best practices:
- Follow an annual compliance calendar to track key deadlines for filings, participant notices, and nondiscrimination testing.
- Review plan documents regularly to help ensure they accurately reflect current operations and regulatory updates.
- Verify that third-party administrators (TPAs) are fulfilling compliance obligations and providing accurate, timely reporting.
- Obtain an ERISA-required fidelity bond to help protect plan assets against potential fraud or theft.
- Conduct internal compliance audits to help identify and resolve potential issues before regulatory reviews.
Ready to Strengthen Your Retirement Plan’s Compliance?
Compliance is the foundation of a healthy retirement plan, and a crucial safeguard for fiduciaries. With proper oversight and documentation, plan sponsors can help ensure operational accuracy, regulatory readiness, and participant confidence.
Contact CBIZ to request your personalized retirement plan benchmark assessment.
Investment advisory services provided through CBIZ Investment Advisory Services, LLC, a registered investment adviser and a wholly owned subsidiary of CBIZ, Inc.
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“CBIZ” is the brand name under which CBIZ CPAs P.C. and CBIZ, Inc. and its subsidiaries, including CBIZ Advisors, LLC, provide professional services. CBIZ CPAs P.C. and CBIZ, Inc. (and its subsidiaries) practice as an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations, and professional standards. CBIZ CPAs P.C. is a licensed independent CPA firm that provides attest services to its clients. CBIZ, Inc. and its subsidiary entities provide tax, advisory, and consulting services to their clients. CBIZ, Inc. and its subsidiary entities are not licensed CPA firms and, therefore, cannot provide attest services.
