PLANADVISER - May/June 2020 - 24
service strategies //
Compliance When It's Tough
Advisers should scope out any plan errors to keep their clients on course
U
nder normal circumstances, running a retirement plan
requires attention to detail to avoid mistakes, but in
today's environment the task is even trickier. Consider
the wildly fluctuating investment market, companies and
staff learning new processes in order to work remotely, the
new regulations for loans and distributions.
In addition, plan sponsors' benefits departments may be
stretched thin, potentially dealing with layoffs, employee
health issues and reduced revenue. Worrying about retirement
plan compliance may not be their top priority.
This makes it even more important for advisers to discuss
potential plan errors with their clients, working with them
to find and correct any issues-and to avoid them in the first
place. The Department of Labor (DOL) has said that it would
offer some leniency to plan sponsors that, due to COVID-19,
fail to follow certain procedural requirements. But that does
not mean a sponsor can sidestep correcting the issues or
showing a good faith effort to remain compliant.
" At the end of the day, even now, the DOL and the IRS are
still conducting examinations
and audits, " says David
Kaleda, a principal with
Groom Law Group and a columnist for PLANADVISER. " It's
not like the regulators have gone away. "
Even if clients lack the budget or desire for a full-blown
self-audit, the adviser can examine the most common areas
that crop up during IRS or DOL investigations.
" Typically, it's a lot cheaper to fix an error before a regulator
sees it, rather than after, " Kaleda says. " A self-correction
is the way to go, if you can. "
What follow are five key operational processes that plan
sponsors legally must always adhere to, observations about
the impact the current situation may be having on how the
sponsor follows through, and suggestions for remedying the
issues that may arise.
1) Contributions
According to law, a plan sponsor must withhold employees'
retirement deferrals from their paychecks and deposit the
funds-as well as its own contributions-into the retirement
trust or participants' individual accounts as soon as is
reasonably possible. Plans with fewer than 100 participants
have a seven-day safe harbor to make the transaction.
What has changed. With many plan sponsors' human
24 | planadviser.com May-June 2020
Art by JooHee Yoon
http://www.planadviser.com
PLANADVISER - May/June 2020
Table of Contents for the Digital Edition of PLANADVISER - May/June 2020
2020 PLANADVISER DCIO Survey
All That Goes Into a Practice
Compliance When It's Tough
A Case For Both
The Alternative Workplace
Damage Control in a Downturn
An Uptick in Customer Arbitration?
Client Relationship Summary
Evaluating Reg BI Compliance
PLANADVISER - May/June 2020 - Cover1
PLANADVISER - May/June 2020 - Cover2
PLANADVISER - May/June 2020 - 1
PLANADVISER - May/June 2020 - 2
PLANADVISER - May/June 2020 - 3
PLANADVISER - May/June 2020 - 4
PLANADVISER - May/June 2020 - 5
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PLANADVISER - May/June 2020 - 9
PLANADVISER - May/June 2020 - 10
PLANADVISER - May/June 2020 - 11
PLANADVISER - May/June 2020 - 2020 PLANADVISER DCIO Survey
PLANADVISER - May/June 2020 - 13
PLANADVISER - May/June 2020 - 14
PLANADVISER - May/June 2020 - 15
PLANADVISER - May/June 2020 - 16
PLANADVISER - May/June 2020 - 17
PLANADVISER - May/June 2020 - 18
PLANADVISER - May/June 2020 - 19
PLANADVISER - May/June 2020 - All That Goes Into a Practice
PLANADVISER - May/June 2020 - 21
PLANADVISER - May/June 2020 - 22
PLANADVISER - May/June 2020 - 23
PLANADVISER - May/June 2020 - Compliance When It's Tough
PLANADVISER - May/June 2020 - 25
PLANADVISER - May/June 2020 - 26
PLANADVISER - May/June 2020 - 27
PLANADVISER - May/June 2020 - A Case For Both
PLANADVISER - May/June 2020 - 29
PLANADVISER - May/June 2020 - The Alternative Workplace
PLANADVISER - May/June 2020 - 31
PLANADVISER - May/June 2020 - 32
PLANADVISER - May/June 2020 - 33
PLANADVISER - May/June 2020 - Damage Control in a Downturn
PLANADVISER - May/June 2020 - 35
PLANADVISER - May/June 2020 - 36
PLANADVISER - May/June 2020 - An Uptick in Customer Arbitration?
PLANADVISER - May/June 2020 - Client Relationship Summary
PLANADVISER - May/June 2020 - Evaluating Reg BI Compliance
PLANADVISER - May/June 2020 - 40
PLANADVISER - May/June 2020 - Cover3
PLANADVISER - May/June 2020 - Cover4
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