Pension plan compliance manual

Review Key Documents To operate in accordance with ERISA and avoid trouble, the plan administrator should ensure that signed copies of the following documents are maintained, reviewed and retained each year.

The most recent plan document, including updated adoption agreements for master, prototype and volume-submitter plans. The most recent service agreements with all TPAs. Avoid Common Mistakes Most importantly, the plan administrator needs to read and understand the plan's provisions to make certain that the plan operates in compliance with them.

The following are common mistakes that can be avoided by understanding the plan document: Inadvertently excluding eligible employees from participating.

The plan document will define eligibility including age requirements, service requirements months, hours , employee classification full-time, part-time, interns, contract labor, etc. The plan document will indicate the sources of compensation gross compensation, W-2 compensation, bonuses, severance pay, taxable fringe benefits, etc.

Inadvertently including or excluding employees from employer contributions. The plan document will define the nature of employer contributions matching, profit sharing, safe-harbor matching, discretionary matching or profit-sharing, etc. Be aware that the eligibility requirements for employer contributions will often differ from those pertaining to employee contributions.

To avoid potential errors, retain a signed copy of the most recent service agreements with all TPAs, read the service agreements to make certain the services being provided by the TPA are understood, and avoid the following potential mistakes: Vesting calculations and census data.

Vesting calculations related to employer contributions for participant distributions are often calculated by the TPA based on the workforce information provided to them. However, many service agreements indicate that the plan administrator is responsible for the proper calculation. Anytime a participant is forfeiting employer funds, a recommended best practice is for the plan administrator to review the calculation.

Ensure that inaccurate or incomplete data is not retained by the TPA to avoid future errors in the vesting calculation. Approving participant loans and distributions. The responsibility for approval of participant loans and distributions should be indicated in the service agreement with the TPA.

A pensions accounts disclosure checklist in accordance with the Pensions SORP and applicable pension schemes regulations. Permanent file documentation that provides a structure for your permanent files and outlines the information required which is of continuing importance to an audit assignment over a number of years.

Pensions specific current file documentation that provides you with the planning, completion and detailed work programmes needed to undertake a defined benefit or defined contribution pension scheme audit. Lead schedules and a current file index are also included, along with a simplified programme for use on earmarked schemes.

A cold file review checklist that will help you perform of reviews of pension scheme audits for quality control purposes. This update to your Pension Schemes Manual should be used with immediate effect. Internet access. Operating System: Windows Office with a locally installed copy of the Office suite is supported. An EP agent can solicit either excise taxes or income taxes. EP examinations can give rise to additional income taxes on the part of plan sponsors or plan participants.

This type of tax adjustment is commonly referred to as a Discrepancy Adjustment. This section is a general explanation of the appeals process, the status of a plan during a pending appeal, the appeals process for discrepancy adjustments, the appeals process for excise taxes, and the appeals process for unrelated business taxable income. This section provides a discussion of the statute of limitations on tax-exempt trusts, prohibited transactions, procedures used by the IRS when protecting a statute, and various publications about statutes.

To ensure timely tax examinations, Congress has set deadlines for assessing taxes and making refunds or credit of tax. These deadlines are called statutes of limitations.

Without statutes of limitations, a tax return could be examined and tax assessed, refunded, or credited at any time, regardless of when the return was filed. Statutes of limitations generally limit the time the IRS has to make tax assessments to three years after a return is due or filed, whichever is later. The date is also referred to as the statute expiration date. Statute of limitations will also limit the time you have to file a claim for credit or refund.

Congress, recognizing that additional time may sometimes be needed to fairly resolve a tax examination, has provided for extending the statutory period by written agreement between you and the IRS.

These agreements, Form , Consent to Extend the Time to Assess Tax, are called "consents" and generally apply to all taxes except estate tax. Notification is usually made by sending Letter , with the most recently revised Publication , Extending the Tax Assessment Period PDF , and the applicable agreements.

Letter advises the taxpayer they have the right to refuse to extend the limitation period, that the extension be limited to particular issues, and that the limitation period can be limited to a specific date. The fixed-date consent, obtained by filing a Form or H, sets a specific expiration date for the extension of the statute, and the date is shown on the consent form.

The open-ended consent, obtained by filing a Form A, Special Consent to Extend the Time to Assess Tax, extends the statute for an indefinite length of time usually until 90 days after the taxpayer or the IRS sends the prescribed notice ending the agreement. If both parties agree, consent agreements may also limit further examination or appeal activities to specific tax issues.

These agreements are called "restricted consents" and can have either a fixed or open-ended date of expiration. A restricted consent is used to extend the statute of limitations for specific items on the return. The statute will not be extended for any item except those covered by the restrictive language on the consent. If you choose not to sign the consent, the IRS will usually take the necessary steps to protect the government's interest by assessing any tax determined to be owed.

This process begins with the issuance of a Statutory Notice of Deficiency. A Statutory Notice of Deficiency is not an assessment of tax nor does it require you to make immediate payment. It is a proposed deficiency which generally gives you 90 days days if the notice was addressed to a person outside the United States to agree to the deficiency or file a petition with the Court for a re-determination of the deficiency. During this period, you may ask Appeals to reconsider the case.

The reconsideration does not extend the day period you have for filing a petition with the Court. The Notice of Deficiency can only be withdrawn under certain circumstances if both parties agree. More In Retirement Plans. Publication 1, Your Rights as a Taxpayer PDF This publication explains some of your important rights as a taxpayer and explains the examination, appeal, and compliance resolution processes.

Section 2 - Initiation of an Examination A general explanation and examples of the techniques and procedures used to select EP examinations, contact taxpayers and their representatives, schedule appointments, and request initial information. The Model Notice is intended to facilitate compliance with this notification requirement. ERISA sets standards of conduct for those who manage an employee benefit plan and its assets called fiduciaries.

This publication provides an overview of the basic fiduciary responsibilities applicable to retirement plans under the law. Understanding Retirement Plan Fees And Expenses — This booklet will help retirement plan sponsors better understand and evaluate their plan's fees and expenses. While the focus is on fees and expenses involved with k plans, many of the principles discussed in the booklet also will have application to all types of retirement plans.

Selecting An Auditor For Your Employee Benefit Plan — Federal law requires employee benefit plans with or more participants to have an audit as part of their obligation to file the Form