More and more nonprofit and higher education institutions are being scrutinized for violations of federal pension fund law. Not only are the Internal Revenue Service and U.S. Department of Labor conducting more targeted audits, but law firms are actively recruiting potential plaintiffs from colleges and universities to use in suits. This is why it is imperative employers conduct a fiduciary gap analysis.
What are the risks?
Plan sponsors and fiduciaries have an obligation to ensure ERISA-covered plans are compliant with the law. With many recent changes in legislation, keeping current can sometimes be an arduous, yet necessary task. Over the past year, several universities have been accused of the following ERISA violations: excessive recordkeeping fees, costly investment options, excessive and duplicative investment options, and inappropriate investment options.
Mistakes and oversights happen to even the most experienced benefit professionals, and it is it is very easy for innocent errors to occur. Personnel, payroll or service provider changes within the department can make existing plan procedures vulnerable. Small errors can quickly become costly, and it is always advisable to have a gap analysis done to ensure you are compliant and audit-ready.
What preventative actions can be taken?
A fiduciary gap analysis includes a review of plan documents and amendments, service provider agreements and participant disclosures, fiduciary roles and responsibilities, plan operations and participant rights and protections. A simple assessment can lower the risk of regulatory fines and penalties. Contact us today for a fiduciary gap analysis.