Top Reasons Why You May Get Audited On Your 401(k) Plan

by | May 21, 2021

Top Reasons Why You May Get “Audited”:

  • High Administrative Fees that may be passed on to the Participants.
    • The DOL frowns upon burdening participants with most or all of the Admin fees.
  • High Fund Fees and you never Benchmarked your plan or did anything about it if you knew.
    • If you don’t do something about high fees, there could be citations by participants.
  • No or little Investment Guidance provided by licensed Advisors (by phone or on-site offered).
    • You should offer at least one day on-site for an Advisor to meet with Participants.
    • w/COVID, you could offer Webinars for group education, then remote one-on-one.
  • No Annual Review of 401(k) Plan for review of Fees, Fund Performance or Improvements.
    • If you don’t have a review and “neglect” the plan, there could be citations.
This is one of the simplest functions of being a Plan Administrator or having a fiduciary responsibility to the plan itself. If you don’t have a plan or process in place to monitor your plan, then your Advisor on the plan should. That Advisor should (or could) be your Fiduciary 3(38) which represents the Plan Sponsor to help them with the Asset Lineup and monitoring of the funds, running Annual Investment Committee Meetings, plan document recommendations and benchmarking. Unless management has a relationship with the Advisor that has skewed their objective view on what’s best for the plan and the participants, you need to look passed that. If that relationship is too strong that could hinder the plan growth, flexibility and expose the plan to a possible audit if neglected.
For a Benchmark Analysis Report and Fiduciary Review call Ron Lang @ 888.403.9400