Stay on the Right Side of the IRS: Easy Steps to Keep Your 401(k) Plan Compliant
Running a 401(k) plan for your business is a great benefit for your employees, but it comes with some significant responsibilities. If you don’t follow the rules correctly, you could face fines or even lose the plan altogether. But don’t worry, the IRS has provided a helpful checklist to keep your plan in good shape.
Before you start
If your third-party administrator (TPA) handles compliance requirements for your plan, you can use this checklist to make inquiries of the TPA to ensure proper compliance is being followed.
Keep in mind that if you, and your TPA if applicable, can answer yes to the below questions there is no guarantee that your plan is fully compliant. The IRS notes that this checklist is meant to be a guide to a more compliant plan.
Questions to ask
The IRS checklist asks the following questions:
If you answered “no” to any of these questions, don’t panic. Many compliance issues can be easily corrected without penalties or reporting to the IRS. However, it’s crucial to make corrections promptly.
If you have questions about maintaining your 401(k) plan’s compliance, BMF Advisors are here to help.
Michael S. Bigler?>
About the Authors
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