Craig Gabel featured in Cleveland Crain's on Spring-cleaning Your Organization's Retirement Plan

With temperatures rising, days lengthening and buds blossoming, the thought of spring-cleaning comes to mind: a burdensome ritual passed down through the generations.

Like many, I too will take an otherwise good weekend and spend it diligently dusting, washing, scrubbing, organizing; you know the drill. Sometimes I'm tempted to cut corners, but I've learned taking shortcuts or working hastily will only lead to more work in the end.

As the plan trustee or plan administrator, now is a great time to “spring-clean” your plan too.

Here are a few tasks, which may “spruce up” your plan:

  • Confirm the appropriate compliance testing has been performed and the Form 5500 is being prepared. For calendar year plans, this testing is typically completed in January or February. A questionnaire is completed which provides data for the return. Ask your recordkeeper or TPA which tests apply to your plan and make sure any issues are resolved.
  • Cash out small balances. Even though an individual may no longer work at your organization, as a fiduciary your responsibility and liability continues until the participant has closed their plan account. Check your plan document to see what options are available for former employees with balances under $5,000.
  • Review the list of those needing to take a Required Minimum Distribution (RMD). If you have former employees in the plan age 70 ½ or older, they may need a RMD. Work with your Recordkeeper to determine who is on the list and how you can assist them with their distribution.
  • Update beneficiary forms. Take a few moments and have your participants confirm their beneficiary designations. Life happens and these updates often get overlooked.
  • Review your plan's Investment Policy Statement (IPS). As a fiduciary you want to ensure that you are managing your plan's investment offerings, and the frequency of their review, in accordance with your IPS. You may want to update your IPS if it is too restrictive, administratively burdensome or no longer consistent with your objectives.
  • Confirm receipt, distribution and review of all fee disclosure documents. In light of recent legislation, you and your participants should have received a myriad of fee disclosure documentation from your covered service providers (i.e. advisor, recordkeeper, TPA). If you did not, request them immediately. Make sure you are reviewing them and understand the services being provided and the overall plan costs. Remember, the costs must be reasonable for the services rendered.
  • Set dates to review education strategy, investments and plan costs. Once you understand the services you are paying for, map out a schedule for the year. If you don't have meetings set, put reminders on the calendar now.

In both cleaning our homes and our retirement plans, if we manage the little tasks along the way, the big “spring-clean” isn't as cumbersome. Hopefully this starter list will make your responsibilities a little easier year to year. Happy cleaning!

Learn how The Humanity Factor is changing the way individuals and families experience planning... 440.683.9200