Are you prepared for a DOL audit? Are your records in good order? If you are an employer, you need to make sure you are prepared for a review before heading into one.
Do you have good record retention? Ensuring you are adequately organized for what may be an inevitable audit is imperative.
Here are 4 items you may want to consider before you step into your 401(k) annual review:
1. Make sure you never throw away plan documents including the adoption agreement, amendments and summary of plan descriptions.
2. Keep a hold on annual filing reports for at least six years, even electronically filed 5500's. You will also want to keep any supporting materials for contributions, testing results, plan audits, summary annual reports, and distribution records.
3. Maintain participant records during employment and up to six years after their termination.
4. Do not throw away loan records even if you've paid it off. Six years is the minimum length of time you should hold on to them.
Filing away all of the above hardcopy items can seem overwhelming in an age where computer files make everything easier to separate into online folders. For your paper documents, make sure you keep one file with multiple sections, and store this file in a place that is readily available to you. Use tabs to organize your materials and label them. For example, a documents tab can hold your tax filings, amendments and/or plan documents. An administrative section can take care of all your past audit results, minutes from past plan reviews, fee benchmarking, etc.
Do not let the U.S. Department of Labor catch you unprepared. Recognize where you may be lacking in your organizational skills, and take steps to improve them this year.
If you have further questions about Employee Benefit Plan Audits, contact Linda Lauer, firstname.lastname@example.org or 901.685.5575.