What does maintaining my company 401(k) plan entail?

With Fisher Investments 401(k) Solutions, it’s not that scary. We make your job a little easier via our service guarantees to you.

As your company’s 401(k) plan sponsor, you are responsible for building and keeping a compliant retirement plan for your employees. There may be a tendency to set it up and forget it—particularly if you have an employee with 401(k) administration experience who can help you navigate the confusing realm of ERISA laws and IRS requirements. But this approach can not only be risky to the business owner, but may also negatively impact the performance of the 401(k) plan overall. Maintaining your company’s 401(k) requires regular attention and a knowledgeable support system.

The list below details your administrative duties as your company’s 401(k) plan sponsor, from the paperwork you’ll need to build your company’s retirement plan to what you’ll have to do on a day to day basis to keep your plan in tip top shape. Fisher Investments can assist you with many of these requirements, from starting up your plan to ongoing maintenance.

Take a look at what you need to do to get your company’s 401(k) plan in good shape—from the first step to ongoing maintenance to make sure it stays that way.

Select & Monitor Service Providers

ERISA law requires plan fiduciaries—the key decision maker(s) responsible for operating and administering the 401(k) plan—to carefully select and monitor plan service providers. A diligent selection and monitoring process should be documented and applied to all plan service providers, including: record keepers, third party administrators, and advisors.

  • Know what your service agreements do & do not cover
  • Keep copies of all agreements with service providers
  • Have a documented process as to how you selected your service providers
  • Perform ongoing due diligence to monitor your service providers
  • Make sure you understand the fees paid to your service provider and how the fees are paid. It is important to make sure that all fees are reasonable.

When it comes to how reasonable the fees are, this area in particular is where the business owner might get into some trouble. If you’ve determined that the service your company’s 401(k) is receiving is worth the cost of the fees you’re paying, then there will be no issues. However, high or hidden fees can cost your employees thousands over the life of their retirement plan. This is why you, as the business owner, must be diligent in selecting and monitoring your service provider, as well as the fees they charge.

Fisher Investments issues one fee for service that is clearly-stated in your Service Level Guarantee with us.

Maintain & Adhere to Plan Documents

ERISA requires plan fiduciaries to act in accordance with the documents governing the plan. Because of this, it is important to create and maintain a plan document consistent with the goals of the plan.

  • Ensure that the features outlined in your plan document are appropriate for your business and that the parameters are reasonable for you to follow. Some ways you can control this are through:
    • Plan eligibility requirements
    • Plan entry dates
    • Types of allowable contributions
    • Vesting schedule
  • Review your plan annually to make sure it’s operating properly according to its terms and regulatory requirements—and serving you and your employees the way it’s supposed to. If Fisher 401(k) is your service provider, your Retirement Counselor can help with this review by going over your plan document with you in plain, easy-to-understand language.

Communicate Regularly With Your Service Providers

There are many times throughout the year that you’ll need to work with your service providers in order to successfully administer your 401(k) plan. Work with your service providers to:

  • Provide them with up to date employee census data when it is requested
  • Calculate employer contribution allocations if needed
  • Monitor employee loans and distributions
  • Complete annual compliance testing
  • Ensure IRS Form 5500 is filed annually and in good order
  • Prepare some annual participant disclosures
  • Create and follow an Investment Policy Statement
  • Make sure your plan documents remain up to date with regulations
  • Make any necessary changes to your plan document

If Fisher 401(k) is your service provider, your Retirement Counselor can assist you with your paperwork load, and help coordinate communication needs with other service providers involved in your company 401(k).

Perform Ongoing Responsibilities

As a plan fiduciary it is your responsibility to make sure that your plan remains compliant. Here are some best practices to help you:

  • Distribute required disclosures to all plan participants in a timely manner
  • Remit employee deferrals to the plan in a timely manner
  • File all required forms with the IRS annually
  • Provide education to plan participants
  • Retain copies of all documents related to the plan
  • Make sure your plan is covered by a Fidelity Bond
  • Meet annually with the 401(k) plan committee to review the plan. Take notes during the meeting and file them

Fisher Investments is a registered 3(38) Investment Manager, meaning we can help take on some of your fiduciary responsibilities.

If you have questions about how to start a 401(k) or other retirement plan for your company, or questions about performing your ongoing plan responsibilities, please contact a Fisher 401(k) specialist.

About Fisher Investments 401k
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Fisher Investments 401(k) Solutions is committed to bringing unparalleled support to small and mid-size businesses and their employees through 401(k) retirement plan services.

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5525 NW Fisher Creek Drive Camas, WA 98607

844-343-4015
info401k@fi.com

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