Nonprofit Resources


Do You Review Your Employee Retirement Plan Annually?

If your organization offers an employee retirement plan, do you conduct an annual review?

Many employers aren’t aware of the complex standards and regulations surrounding employee retirement plans and their fiduciary duty as plan sponsors.

An annual review can help you meet your fiduciary responsibilities and avoid mistakes. This article from the Journal of Accountancy explains why an annual employee retirement plan review is important and outlines how to prepare for one. This includes taking the following steps:

  • Identify the fiduciaries of your plan. According to the Department of Labor, a plan fiduciary is anyone “exercising discretion or control over the [retirement] plan.” Fiduciaries need to know and follow plan requirements.
  • Review the plan documents to understand the provisions. Make the necessary updates whenever the plan is modified. This includes updating the retirement plan document and summary plan description and notifying employees.
  • Examine:
    • Compliance with the plan documents and IRS and Employee Retirement Income Security Act (ERISA) regulations
    • Plan fees
    • Investment performance
    • The accuracy of compensation calculations and employee data
    • Understand fiduciary duties. It’s important for your organization to understand its responsibilities as plan sponsor, as well as the role of any third parties you may contract with. This article on the responsibilities of third-party administrators vs. retirement plan sponsors can help.
    • Understand how different definitions of compensation are used in retirement planning and make sure contributions are made based on the correct definition.
    • Ensure employees’ monetary distribution options are clear and that employees provide the name and contact information for their beneficiaries.
    • Encourage employees to review their accounts each year.

You can read the full Journal of Accountancy article here. We encourage you to contact us with any questions. The rules and regulations for employee retirement plans are complicated, and our dedicated team of employee benefit plan professionals is here to help!

Emily Toler

Emily serves as a partner in the Indianapolis office and as the firm’s Employee Benefit Plan Services Director. Emily has 20 years of experience providing audit and tax services for employee benefit plans, with a primary focus on 403(b) plans. She currently oversees approximately 70 benefit plan audits and related filings. Emily also is a member of the AICPA Employee Benefit Plans Audit Quality Center Executive Committee.

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