PLANADVISER - January/February 2021 - 11

The Errors in One's Ways
How advisers can keep plans on the federal agency rails
ALTHOUGH NOT involved in the day-to-day administration of a plan, advisers can help
sponsor clients remain compliant with the rules of the Department of Labor (DOL) and
the IRS. In making sure that a plan adheres to these rules, advisers will need to coordinate
with the plan's payroll provider, third-party administrator (TPA) and recordkeeper.
Many of those partners may offer " checklists and resources to help an adviser run all
of the checks needed, " says Khash Sarrafi, senior vice president of Envestnet | Retirement
Solutions. " There are also third-party reporting tools that advisers can use that provide
the visibility needed into plan and participant activities by way of integrated data. "
The first principle for keeping plans on the rails is for advisers to religiously attend
plan committee meetings and meet individually with the plan's fiduciaries to discuss
compliance deadlines and the big issues that the IRS and DOL have been finding in
plans, says Carol Buckmann, co-founding partner at Cohen & Buckmann. Equipping
the plan with compliance calendars goes hand in hand with this, she adds. " Many
advisers will also conduct fiduciary education sessions, often with the help of an
ERISA [Employee Retirement Income Security Act] attorney, " Buckmann says.
One big mistake,
revealed on Form 5500,
One big mistake ...
is sponsors failing to
make contributions
and company
matches on time.
is sponsors failing to make contributions and
company matches on time, Buckmann says. The
adviser can assist by ensuring that the sponsor
coordinates with the payroll provider and that
the person responsible for the contributions has
named a replacement if planning, say, to be on
vacation, Buckmann says.
Another frequent sponsor error is failing to keep
pay codes in the payroll system consistent with
the right definition of compensation in the plan document, says Robyn Credico, defined
contribution consulting leader, North America, at Willis Towers Watson. Both the contributions
and payroll codes should be monitored to keep errors from creeping in, she says.
All eligible employees also must be given access to the retirement plan; whether
the plan has achieved that can be reviewed through auditing plan eligibility on the
human resources (HR), payroll and recordkeeping systems, Credico says. " What I often
see is that people who should be automatically enrolled at a certain time aren't being
enrolled on time. Conversely, certain groups such as part-time employees, are sometimes
mistakenly entered into the plan. "
Ensuring that loans and hardship withdrawals are being managed properly is best
delegated to the recordkeeper, Credico says. Advisers, however, can " also make sure the
sponsor's HR and payroll systems are set up to sort repayments on time and stop them
when the loan is paid off. "
Another common way to err is to fail nondiscrimination testing and have to issue
refunds to the more highly paid employees, Buckmann says. For plans that frequently fail
tests, advisers can tell the sponsor the benefits of moving to a safe harbor plan, she says.
Working with the TPA, advisers also need to conduct plan testing, which is complicated,
says David Joffe, a partner and chair of the employee benefits and executive
compensation practice group at legal firm Bradley in Nashville, Tennessee. " Advisers can
help employers review and understand the testing results. If there are issues, the adviser
can help employers change their plan design. "
" Better advisers make sure to proactively understand the terms of their clients' plans
and encourage the sponsor to conduct internal operational audits, " says Rachel Smith,
a partner with Goodwin Law. These advisers take a sophisticated approach by creating
alerts and a monitoring system in their clients' information systems that will tell them
when a mistake is being made, she adds. -Lee Barney
ON THE MOVE
➜ Hub International has
named Joe DeNoyior
as the new leader for its
retirement and private
wealth group. He takes
over after the sudden
death of previous group
President Dave Reich.
➜ Retirement
technology business
Smart announced its
new U.S. executive
team, which will launch
the company's modern
recordkeeping and
retirement income
solutions in the U.S.
market.
➜ Qualified Plan
Advisors (QPA) acquired
the retirement advisory
practice of First National
Bank of Omaha (FNBO).
FNBO staff will join QPA
to ensure a seamless
transition for clients.
➜ Mercer Global
Advisors Inc. acquired
Kays Financial Advisory
Corp., a wealth
management firm in
Atlanta with more than
$800 million of assets
under management.
➜ Vestwell named
Richard Tatum as
president of retirement
services. Tatum will be
responsible for scaling
platform operations,
administration and client
services.
planadviser.com January-February 2021 | 11
➜

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PLANADVISER - January/February 2021

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