Every year it is important that you review the requirements for operating your 401(k) retirement plan. Use this checklist to help you keep your plan in compliance with many of the important rules. For additional information and resources, you can visit www.irs.gov\/retirement. Please note that this checklist is not a complete description of all plan requirements, and should not be used as a substitute for a complete plan review.<\/p>\n
1.\tHas you plan document been updated within the past few years?
\nIf your plan hasn\u2019t been updated to reflect recent law changes, the plan needs to be revised.<\/p>\n
2.\tAre the plan operations based on the plan document terms?
\nFailure to follow the terms of the plan is a common problem found on audit.<\/p>\n
3.\tIs the plan definition of compensation for all deferrals and allocations used correctly?
\nYour plan may use different definitions of compensation for different purposes. It\u2019s important that you apply the proper definition found in your plan document.<\/p>\n
4.\tWere employer\u2019s matching contributions made to appropriate employees under the plan terms?
\nThe plan terms must be followed when allocating employer matching contributions.<\/p>\n
5.\tHas the plan satisfied the 401(k) ADP and ACP nondiscrimination tests?
\nMost 401(k) plans must satisfy yearly ADP\/ACP nondiscrimination tests.<\/p>\n
6.\tWere all eligible employees identified and given the opportunity to make an elective deferral?
\nBy supplying your tax advisor with information regarding all employees who receive a Form W-2, you may reduce the risk of omitting eligible employees.<\/p>\n
7.\tAre elective deferrals limited to the IRC Section 402(g) limits for the calendar year?
\nFailure to distribute deferrals in excess of the 402(g) limit may result in additional taxes and penalties to the participant and employer.<\/p>\n
8.\tHave you timely deposited employee elective deferrals?
\nYou should deposit deferrals as soon as they can be segregated from the employer\u2019s assets.<\/p>\n
9.\tDo participant loans meet the plan document and IRC Section 72(p) requirements?
\nDefaulted loans or loans in violation of IRC Section 72(p) may be treated as a taxable distribution to the participant.<\/p>\n
10.\tWere hardship distributions made properly?
\nIf a plan allows hardship distributions, the plan terms must be followed.<\/p>\n
11.\tWere top-heavy minimum contributions made?
\nIf the plan is top-heavy, minimum contributions for non-key employees are required.
\n12.\tWas Form 5500 filed?
\nMany 401(k) plans must make an annual filing with the Federal government.
\nIf you answer \u201cNo\u201d to any of the above questions, you may have made a mistake in the operation of your 401(k) plan. This list is only a guide to a more compliant plan, so answering \u201cYes\u201d to each question may not mean your plan is 100% compliant. Many mistakes can be corrected easily, without penalty and without notifying the IRS. If you have any questions, please contact CMCD LLC at 713-771-9646 ext. 715 or via email: henrynguyen@cmcdllc.com.<\/p>\n","protected":false},"excerpt":{"rendered":"
Every year it is important that you review the requirements for operating your 401(k) retirement plan. Use this checklist to help you keep your plan in compliance with many of the important rules. For additional information and resources, you can visit www.irs.gov\/retirement. Please note that this checklist is not a complete description of all plan […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/cmcdllc.com\/index.php?rest_route=\/wp\/v2\/posts\/883"}],"collection":[{"href":"https:\/\/cmcdllc.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cmcdllc.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cmcdllc.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/cmcdllc.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=883"}],"version-history":[{"count":2,"href":"https:\/\/cmcdllc.com\/index.php?rest_route=\/wp\/v2\/posts\/883\/revisions"}],"predecessor-version":[{"id":1624,"href":"https:\/\/cmcdllc.com\/index.php?rest_route=\/wp\/v2\/posts\/883\/revisions\/1624"}],"wp:attachment":[{"href":"https:\/\/cmcdllc.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cmcdllc.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cmcdllc.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}