Retirement Plans: What Every Employer Needs to Know

Creating retirement plans for yourself and your employees provides great benefits, but also presents risks for the uninformed. Here is what lawyers on JD Supra are saying about the duties and opportunities of administering company plans.

Why Retirement Plan Sponsors Shouldn’t Only Focus on Low Fees (The Rosenbaum Law Firm P.C.)
“While paying unreasonable plan expenses is a breach of fiduciary duty, picking providers solely or mainly because they are low in fees can also breach the fiduciary duty…in hiring any plan provider, a fiduciary should survey a number of potential providers. By doing so, a fiduciary can document the process and make a meaningful comparison and selection…a plan provider needs to select competent plan providers that charge reasonable expenses.” Read more »

Retirement Plans: Supreme Court Says SPD Terms Not Enforceable As Plan Terms- Court’s Holding Leaves Opening for Showing Actual Harm (Davis Wright Tremaine LLP)
“Despite this narrow holding, the Supreme Court, in dicta, expanded the scope of equitable relief available under ERISA 502(a)(3), suggesting that the traditional equitable remedies of reformation, equitable estoppel or surcharge are available to provide relief, and that a showing of detrimental reliance is not required for all equitable remedies, but plaintiffs must show ‘actual harm.’ Read more »

Companies Should Be Reviewing The Impact of 409A On International Arrangements (McKenna Long & Aldridge LLP)
“The broad provisions of Section 409A of the Internal Revenue Code of 1986, as amended (“409A”) reaches beyond U.S. borders. In addition to the typical compensation arrangements between a U.S. company and its U.S. employees, 409A can also apply to compensation arrangements between a U.S. or non-U.S. company and U.S. employees or other service providers working outside of the U.S., as well as certain foreign nationals working in the U.S.” Read more »

An Ounce of Prevention (Warner Norcross & Judd)

“Several major audit initiatives have been launched this year by government agencies involved with employee benefits. As a result, the agencies have identified areas of emphasis and common errors discovered during routine and random audits. What follows is a break down by agency of the targeted areas.” Read more »

Retirement Scheme for Tax Break (Darrin Mish)

“If you are a small business owner, you should take advantage of the tax law that allows you to draw up a retirement benefit scheme for your employees. This is because you can claim tax deductions from it if you have such a scheme.” Read more »

Multiple Employer Retirement Plans: A Bigger Bang for The Buck (The Rosenbaum Law Firm P.C.)
“The comeback of MEPs is a positive development in the retirement plan business because it offers a choice to retirement plan sponsors on how to get a better plan at a better price while eliminating most of the liability that goes with being a plan sponsor and fiduciary. While MEPs aren’t for everyone, they are a choice for many plans to consider whether being part of a MEP outweighs the risk of being a standalone plan.” Read more »

Gavel to Gavel: A Few Tips for 401 (k) Plan Sponsors (McAfee & Taft)

“With so much at stake for both the employees and the companies who sponsor them, retirement plans are, by their very nature, complicated documents. And it’s sometimes the smallest things – like not following a plan’s written definition of ‘compensation’ – that can expose the company sponsor to significant financial and legal liability.” Read more »

For further research, you may find these article useful:

The Value Of A Good ERISA Auditing Firm 

The Smaller The 401(k) Plan, The Bigger The Problems

401(k) Plan Provisions That Are Good Ideas

The Curse of Participant Directed 401(k) Plans