Conducting your annual plan review - DWS Investments

PLAN ADMINISTRATIONAND RECORDKEEPINGKeeping accurate records of plan data and managingits administration are two of the most essentialfunctions of the plan’s sponsor. Careful review of theserecords and data can help prevent potential futureproblems with regard to key plan areas.Your annual review should include an assessment ofeach of the following administrative and recordkeepingfunctions within the plan:Administration■■Testing of contribution limits (e.g., 415, andelective deferrals)■■Determination of investment earnings allocations■■Determination of vested account balances■■Reconciliation of outstanding participantloan balances■■Consistency of hardship determinations with theterms of the plan document■■Review of distribution processing upon terminationof employment, retirement, death or disability■■Confirm that all applicable ‘covered service providers’ 1to the plan have provided timely applicabledisclosures required under the DOL’s new serviceprovider compensation disclosure requirement,Section 408(b)(2) of ERISA (effective July 1, 2012)■■Confirmation that all required nondiscrimination(ADP and ACP) testing has been properlyconducted, including corrections, if necessary■■Review of annual Internal Revenue Service (IRS)limits for:––Elective deferrals––Annual compensation limits––Catch-up contributions––Defined contribution dollar limits––Highly compensated employee threshold––Social Security taxable wage base––Medicare taxable wage baseRecordkeeping■■Reconciliation of employee data■■Determination of plan coverage and eligibility■■Summary of profit sharing and otheremployer contributionsSubstantiation that plan reporting and disclosurerequirements have been met■■Summary Annual Report (SAR)■■Quarterly benefit statements to participants■■File Form 5500 Annual Report with the IRS■■If your plan is a participant-directed plan, ensure thatthe plan complies with the Participant DisclosureRegulation and that copies of relevant disclosuresare provided by Aug. 30, 2012 (for calendaryear plans) as well as new fee information in thequarterly participant statement (the first suchquarterly statement must be provided no later thanNovember 14, 2012 for calendar year plans)■■Summary Plan Description (SPD) and any materialmodifications thereto have been distributed to planparticipants and beneficiariesManaging plan reportsPlan sponsors are ultimately responsible for makingsure that the plan operates in compliance withfiduciary requirements. As such, procedures should bein place to see to it that all required nondiscrimination(ADP and ACP) testing is properly completed, includingany corrective distributions.1See page 12 for definition and information on ‘covered service providers’.8 » Conducting your annual plan review