Episode Summary The latest Department of Labor (DOL) Audit Quality Study dives into where the most errors in an employee benefit plan (EBP) audit occur and why the practice has become more specialized than ever. Audit firms with less experience in 401(k), 403(b) and other types of EBP audits have higher average rates of errors compared to more experienced firms. Kim Moore, director and 401(k) audit practice leader, and Karen Hill, audit and assurance manager, discussed the results of the study and what implications it holds for businesses undergoing an EBP audit.
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Narrator: Welcome to the 401k audit CPA success show, where we're 100 percent focused on helping companies across the United States prepare for their 401k audit. If you have 100 eligible participants in your 401k plan, then this podcast is for you.
Kim Moore: Well, hello everyone. This is Kim Moore with Anders CPAs and advisors.
And I have Karen Hill with me. Karen is our manager here on the team, and we are doing this month's podcast on the 401k audit success show. We talk every month about 401k plans, 401k plan audits, compliance issues, things like that. So we're glad that you were able to join us today. I'm, before we get started, I'm going to throw out my email address.
It's the letter K, then it's M O O R E at Anders, with an s, c p a dot com. So feel free if you have comments on today's podcast, you have ideas for future podcasts, just have general questions, you need a 401k plan audit, any of those kinds of things, feel free to reach out to me. I'd be happy to get in touch with you and talk through whatever ideas, concerns, issues, needs that you might have regarding your 401k plan.
So with that, we are going to get started with today's topic. Today's topic, it's beginning of the year. So we are, we thought well let's talk a little bit about if you're a plan administrator or you're You work with a 401k plan, some things that you might want to think about as you're getting ready to start the new plan year.
Now, with a 401k plan, you've got kind of two things going on at the beginning of the year. You're getting ready to do all the things you need to do to administer the plan going forward for the new plan year. And with that, you've got things like IRS rates might change. You might have a new payroll policy, something like that.
You got benefit enrollment, you know, that might be coming up. But you also have your end work that you have to do for last year's plan. Last, if you have a calendar year plan, your plan year doesn't end 12 31 and you're all done, you still have some things that you have to do. So, with that in mind, we're going to kind of talk about both of those pieces, but we're going to do a focus on changing from being a reactive plan administrator to being more of a proactive plan administrator.
We all know being proactive is usually better than being reactive,. So how can I, as a plan administrator or someone who works with my company's 401k plan, I have some involvement at some level. We're going to talk a little bit more about that. How do I change over from being more reactive to proactive.
So before we get really into the topic... what does that really mean reactive versus proactive? What we see a lot when we work with our clients new clients, especially or maybe prospective clients, I hear a lot of things that, "Well, you just need to talk to my record keeper, my TPA, my service provider," whoever you might use to do a lot of the work for the 401k plan.
"You don't need to talk to me, you don't need to talk to my company, you don't need to talk to my staff, you just need to talk to those service providers because they do everything for the plan." And so if that's the case, then more than likely you're in a reactive mode. So you are relying on those service providers and their staff to let you know if something's changed, if you need to do something, if you were supposed to do something and you didn't do it. You're relying upon them to give you all of that guidance, and really to do all of the work for your 401k plan.
That's reactive not proactive. But it's also dangerous because we, we see a lot of service providers that they'll send emails reminding you to do tasks. They'll send emails reminding you that you didn't do a task and no one ever updated the email and that person left 10 years ago. And so it's going in a big black hole.
And so we'll, we'll get people coming to us and saying, "Hey, we haven't filed a 5500 for. because the person who did that left and, you know, the email never got updated. We didn't know we were supposed to do it." And now they're in a big mess. They're going to get a big fine. And so anyways, I think being proactive is a much better stance.
It puts you in a better position. It's... even if you make mistakes, it's easy, easier to defend when you're being proactive and trying to make sure everything's getting done for your plan that needs to it's timely and it's correct and all those kinds of things. So that's what our focus is going to be on today.
So I outlined a few areas that I thought we could talk about to make sure that you're being this proactive person that's going to take care of your 401k plan. So first thing is, Karen, making sure that all the roles are clearly defined. So what are some, what are some thoughts there with that topic?
Karen Hill: This is really important because we often find when we're conducting an audit and we're asking questions about who does what sometimes people sometimes the clients don't really know who does it or they think somebody does it and they don't to the the roles. The key roles in a plan are the plan trustee and the plan administrator. Sometimes they're the same person.
Not always. Also, you need to know as far as the plan compliance, as far as who's going to file the form 5500, who's going to prepare the census, which is what is used in the compliance testing, and who is going to actually respond to any issues that might be noticed in the compliance testing. Who, who's in charge of doing that, those type of tasks.
And also you might have requests from the employees or or from the participants, or maybe there's a beneficiary. You know, who, who are the people that are going to respond to any of those inquiries? You , , maybe you have a terminated participant, or, you know, maybe even was an active participant who suddenly passed away and their beneficiary wants to know, what do I need to do in order to get the money from my loved one's account and, you know, need somebody to be able to answer those types of questions.
If you happen to have an inquiry from the DOL or the IRS, who's the person who's going to respond to those inquiries? And you know, maybe the DOL decides that they're going to come in and do an audit. Who's going to be the, the contact person, the point person for that? And you'd be in charge of all of those types of things.
Kim Moore: And we hear from the, especially the DOL all the time, that this is an area of concern and frustration with them because quite often they will send a, like a certified letter indicating, "we see something wrong. We have a concern about something. We have an inquiry about something," or as Karen mentioned, "we're going to do an investigation and audit or review, whatever it might be."
And then they get no response. And they are forced into action that a lot of times they don't themselves want to take but Congress has laid out certain rules for things within... you know, they set out regulations and then if those regulations are not upheld, usually it's going to end up with a fine of some sort. And the DOL, and the IRS to an extent, but their hands get tied if you don't respond, then after a point in time you are going to get an automatic fine.
There's no recourse. You can plead whatever you want. It's not going to make any difference because the DOL's hands have been tied by Congress. So, you know, we always tell people that the DOL, whenever conferences that we go to, they say, please respond.
You know, you may not have an answer. You may, you know, maybe this comes out of the blue. You, you know, you don't know anything about it. Maybe you're brand new to the company and you didn't even know that you had a 401k plan, but just make sure someone from the company is responding. Because at least if you respond, you have a chance to mitigate things down the road. If no one responds, you're trying to figure out what to do and you don't respond and it takes too long then you've cut off some of your options.
So, so be very careful with that and don't also- don't assume, "well, that's the DOL. So, you know, maybe the president of the company or the head of the department, they're going to take care of it. So I'm not going to do anything." And they're thinking, "well, that's your responsibility." And so then nobody responds.
Karen Hill: Correct.
Kim Moore: So be a little careful with that.
Karen Hill: And it's, it's really a good idea to have these responsibilities spelled out in the job description somewhere. So that everybody is really, is very clear on who performs what task? I mean, I normally, I mean, just logically, you know, participant inquiries are probably going to be somebody in human resources, but not necessarily, but you should have that.
And, you know, if you have a large human resource, or I shouldn't say large, but if you have more than two people or more than one person in a human race in the human resource department. You know, you might want to delegate. Is it necessarily the head of human resources or is it somebody else that's going to deal with these types of things, but you really should spell it out in the job description so that everybody knows who is responsible for what task. And make sure it's someplace where the employees can reference it if they need to.
Make sure when you, if you have a new person in HR or in payroll or whatever in finance or whoever it is, make sure that these tasks are included in the employee training so that they understand that that's part of their responsibility as soon as they start their job. That's not something where they've been there for 6 months and oh, by the way, you're supposed to take care of this.
Really is a good idea of that they know basically the 1st 1st day 1st week when they first start the job that this is part of their responsibility. Make sure with new employees or employees that are terminated that had these responsibilities, make sure you review the plan access, but payroll and to the record keeper whatever kind of accesses you have for the plan, make sure you review and make sure and make sure that everybody that has access is current and that they, it's appropriate access.
Like I know for us as auditors, oftentimes we get access to some of these systems and we need auditor access. We do not need administrative access. So make sure, you know, if you have your auditor on there, make sure you they have the proper access. Because we don't want to, I mean we, with administrative access, I mean, we wouldn't normally make changes, but I don't wanna be able to do something accidentally.
Kim Moore: I don't want to make a mistake.
Karen Hill: Exactly, exactly.
Kim Moore: Yeah, we're going to talk a little bit in a little bit later here about monitoring, but definitely, and we talk a lot about access. And so if you listen to our podcast, you probably go here they go again with that with the access comments but depending on what access an individual has and we're talking here about like a plan administrator who has what is called administrative access they can have a lot of access. So they could, you know, if they wanted to do something nefarious or just by mistake, could go in and generate funds out of an account, they could change investment settings that someone has.
Karen Hill: Deferral rates.
Kim Moore: Yeah, there's a lot of things that they could change. Like I said, you know, doing something that that they shouldn't be doing, committing a fraud, but they also could do something just by mistake.
So it's, it's really important that you, on a regular basis, review who has access, what levels do they have, what can they do. Make sure you understand what can they do with those levels. Usually when you're filling out an access form with a service provider, they're, they're just going to give you a kind of a tick, tickable list and you're going to check one of the boxes and say, "hey, Suzy should have this level," but make sure you understand by giving Suzy that tick level, what does that mean?
What can Suzy do with that access? And it's best practice, obviously, when someone either starts leaves or they're changing responsibilities in a role, that you're going to always look at their access. That's the best practice. But quite often you get busy, you forget, especially if it's a small group. So best of intentions, you know, you meant to remove that access to that person that just left.
But you know, come to find out. The auditor comes in and looks at it two years from now and, hey, Suzy still has that access and she left several years ago. So, we, and it's another area that we recommend you do regular monitoring. Even if you've had the same people working in the same roles for several years, it's a good idea to just double check.
Again, something could have happened at that service provider and they might have changed something. So, good idea to just do a review on that periodically, just to make sure.
Second area we have is I call it a compliance calendar. That's maybe not the best way to put it, but we're getting ready. Early in the year and you're going to have a lot of activities that you're going to have to do with the plans throughout the year.
And some of those activities are with the plan and the plan service provider. It might be with some of the investments potentially if some of those are held by different organizations and it definitely will include your payroll system. So what I recommend is, to make sure that everything stays on track and you're not, you know, chasing your tail trying to get things done at the last minute, is that you set up a calendar.
Now, you know, it doesn't have to be a paper calendar hanging on the wall like the old days. I mean that might be people putting tasks on their Electronic calendar, you know with their with your email system. It might be assigning out things to people and you're making sure that they've put in follow up tasks to make sure that those things are getting done.
Whatever works best for you and for your staff doesn't, the method doesn't matter but just making sure that everything is on that calendar. The due dates are very clear. You've, you know, you don't put the, oh, the 5500 has to be filed by the end of July, on the end of July. Make sure you're putting it ahead so you've got plenty of time to make sure that you can get things done by the, by the due dates.
This is what Karen talked about earlier making sure all the tasks are assigned. Obviously, you can't put tasks on people's calendars if you don't have it, the tasks assigned to someone. So that's where kind of that comes back in. That, that the folks that know that they have these assignments, they can put it on their individual calendars.
So they make sure that you know, that they know they're going to be doing it. They've assigned it plenty of time in advance to get it done. And also then if they have a last minute, "I'm going to be out of the office," then, you know, whoever's covering from them can make sure that, oh, I take that over, or I make sure it gets done when that person comes back.
I think a good thing here too is follow up. So again, best laid plans. I have this on my calendar. I mean, I don't know about you, but I come in at the beginning of the day and I have my list of things I'm going to get done. And by the end of the day, I still have things on that list. They didn't all get done.
So make sure that there's some kind of follow up, whether that's you yourself following up. So maybe you're moving that task to the next day. I didn't quite get that done today, but I've lived, given myself plenty of extra time. So I'll do that tomorrow. Or if that's maybe the manager is doing the follow up, they're not going to do any of the tasks.
They've delegated them all, but they're going to come in and make sure that the, you know, that the 5500 did get filed. That the census data that the service provider needs at that did get prepared and it's over to them. So.
Karen Hill: Yes, and the follow up to when the compliance testing comes back. Because if you if your plan has to make corrections, those corrections need to be made by March 15th to avoid excise tax.
So you want to make sure that you get the data over to your record keeper or whoever's running the compliance test. If you have an outside, as you know, a 3rd party administrator. And that those tests are run in enough time for you to review the results and then make corrections, because there's a couple of different ways you can make the corrections, which we're not going to go into, but you want to make sure you have time to review it and make sure that those corrections are made to avoid the excise tax.
Kim Moore: Right. Right and then we also suggest that you don't, you know, once you put the calendar in place, you don't just roll the calendar year to year to year. Because there will be new tasks, maybe tasks that can come off the calendar, but there will also be new tasks. And you also want to look back at how did last year go did something you know, change that You know, we thought this was going to work doing it this way, but that didn't really work, and so then we were running behind, and we thought we got something done, but it didn't get done, and so so take a look.
How did last year go? Also try to plan for what's new. Every year there are regulatory changes that have to get taken care of. They may affect your plan or they may not. So, you want to kind of look at that, do an analysis of that. Every year the IRS changes limits on things. Your payroll system is going to change.
So, and make sure as we're going through all of these discussions, You're not just focusing on the 401k plan, you need to think about payroll as well. So-
Karen Hill: That's true.
Kim Moore: -you know, when we're talking about access that-
Karen Hill: We've seen that where they didn't update the limits in payroll before. And so the people wanted to maximize their contributions and they didn't because the payroll limit wasn't updated to the new level. I've seen that.
Kim Moore: Right. So yeah, so make sure that you're... you're factoring that in as well. We see a lot of late contributions, especially for new plans, because people don't understand. And there's a misconception out there that the IRS has something out there, it's a safe harbor rule, and people think, oh well that always applies to me, which it doesn't.
Sometimes it does, but, but there are times when it doesn't.
Karen Hill: Yes, if you need an audit, it doesn't apply.
Kim Moore: Exactly. So, you know, number one, make sure you understand those rules, but also the way to combat that regardless, and it would be a good best practice, even if you're very small plan, is that I run payroll on maybe Friday every other week, and by Monday of the next week, I have submitted the contributions coming out of that payroll, you know, to my service provider or by Wednesday of the following week or whatever.
Doesn't really matter so much the timing on it. It's just that you need to be consistent and not be taking an excess amount of time, obviously. But you know, we recommend that you build in payroll tasks into this calendar as well.
And, and you, you kind of consider that. Also, at the beginning of the year, a lot of times companies will, they may, you know, especially if you add a a new type of product, or you, you've purchased a company, or maybe you're adding some type of new service, or new product, you're working in a new area of the country or something, those are times when you may be making changes to your payroll system.
So that could happen anytime during the year, though, as well. So, just be a little careful. Don't assume it's just the beginning of the year. But that's a good time to go in and review all of the changes you're making in that payroll system. If you're adding compensation codes, if you're adding deduction codes, think about all of the benefits.
Here we're talking about 401k plan, obviously, but there's other benefits, and make sure that that you've adjusted the way those payroll codes are going to work. We've, yeah, we've had audits and I, I struggle to understand this, but the people that were salaried, their compensation that was used for the 401k deductions, whether they were saying, hey, deduct three percent or deduct, you know, a certain dollar amount, that was all fine.
But once the employees started having vacation time, sick time, bereavement time, jury duty, pay hourly people, and maybe they have a salary you know, hourly differential, or they had overtime... whoever set the payroll up forgot to make those part of compensation. So, you had this huge amount of compensation that was not being deferred against by mistake and it, it turned out to be a pretty costly error because it affected everybody. So, so again, be careful.
Karen Hill: Make sure the deductions come out in the right order. I've seen that too, where the Section 125 deduction came out before the 401k. And that almost is never the case, and in this case it was incorrect. That was a smaller error, but still, it was an error that needed to be corrected.
And then you have earnings on top of that. So, we try to avoid that.
Kim Moore: Right. So, we, we bring it up with the compliance calendar because a lot of times that stuff gets changed at the beginning of the year, but it could be any time. So which is going to go into our next topic, which is education, which we always try to, to kind of preach about education with folks.
Now education. You know, kind of what I was thinking here is, is a few different levels. So education could be participant level. So, we always try to, to focus people on, you know, having sessions with your employees. And or with your participants to give them information about the plan information about how the plan works.
Certainly if you're going to make a change to the plan we think that's a good idea. But as you're putting together that calendar for the year, this would be a good time to think about, do you want to try to schedule in those sessions? Because you might want to have an investment advisor come do those sessions.
So obviously you got to coordinate with them. Same thing if you want to have your record keeper come talk about different provisions that are coming in. So, you know, those are, those are good opportunities to get more involvement by participants to get more involvement by employees in the plan, which is, of course, should be your one of your goals is to get the participation level high.
So consider, you know, consider having that, you know, that added into your into your calendar, scheduling that out and think about what does that look like? Is that once a year? Is that twice a year? Is it every quarter? Is it, you know, you know, your, you know, your, your staff and, and what's going to work and, and how much effort you want to put into this.
But I think that's, that's one thing that, that you can kind of think about at the beginning of the year and factor in. Another thing that I think is important is to think about how is the plan going? So so you want to kind of look at the participation level. I mean, are you spending a lot of time and effort putting out this 401k plan and very few people are taking advantage of it?
I mean, if that's the case, then maybe there, that's an opportunity there to maybe people aren't participating because they just don't understand it. So, some education you know, might, might help there. The other side of education, though, is YOUR education. So if you're the plan administrator, you're the plan trustee you're in HR or you're in benefits as we said, there are changes every year by the IRS, by the DOL, especially by Congress.
And those can be very complex changes, they might not go into effect immediately, they might go into effect, you know, in another year or two years or three years, but you need to plan ahead. If you don't know about those things and you're relying on your service provider to tell you they may tell you, "hey, this year this is coming into play, and you needed to be tracking people's hours for three years."
And you're like, "well, no, wait a minute. You're just telling me now and I need to-" you know. You're going to be behind the eight ball again. So there are a reason I bring that up There are SECURE Act changes and we've talked about that on other podcasts. They're coming in that you do need to be monitoring hours for people in certain situations.
So I bring that up as a specific example That those are things that you're going to want to be on top of and being proactive. Getting some education yourself will help you to be proactive. It'll also help you to understand when your service provider comes to you and says, this change is coming, it's not going to, you're not going to look at it and say, I have no idea what you're talking about.
You're going to have a little bit of background. So so I think that will help you. Also, education for new hires. This probably goes without saying, but as you're having personnel changes and someone's taking over something, you know, you want to make sure that they understand all these things that we've talked about.
So, their roles, the timing, who's responsible, how do they do it, that kind of thing. Next area Karen, I thought one thing we could talk about is participant satisfaction. So, be proactive about, how do I be proactive about making sure my participants are happy with the plan?
Karen Hill: Well, one way you could do that is to actually ask them in some way.
That doesn't necessarily mean, it could, but doesn't necessarily mean that you have to walk around and say, Hey, are you happy with the 401k plan? But you need to, to be aware if there's any complaints about the plan. You know, maybe people are talking about it, or you could have a review board. If, or if you already have a review board, or you have a committee, maybe you should consider having an employee on that review board, and you, that way you can.
Look at their suggestions and look at implementing their suggestions. Maybe it's something as simple as, "well, you only offer 10 mutual funds and I wish that there were a better selection of mutual funds in the plan," you know, or some of it, you might not be able to do anything about, but at least if you have an understanding of what their complaints are about the plan, then you can look at doing something about it. I mean, I've seen where... usually when I've seen that employees have complained, it's usually around the employer match more than anything. That's usually what they're not happy with. And you might not be able to do anything about that, but maybe you can. You know, maybe it's they maybe You can implement a safe harbor match because it's not going to cost...
it's not going to cost any more than what you're doing now. You know, maybe you could do something like that. You know, it's just, you know, just speak cognizant of what the employees are thinking about the plan and what their complaints are.
Kim Moore: Right. And you know, I think we're going to talk here next about monitoring.
A lot of companies have a investment committee or a 401k plan committee or, you know, they can call it different things. And so, and there, some of them are at different levels and have different purposes. But if you have just a general kind of 401k plan committee, it's not a bad idea to have a participant on there or an employee on there, or maybe you have a general benefit committee you know, and, and so there, there would be an opportunity to have an employee or maybe a couple of employees.
And then have them provide feedback from their coworkers about, you know, "Hey, I heard that this option could be provided in a 401k plan. Could we do that?" You know, that those are the kinds of things that are, are important here. As Karen said, maybe you can do it, maybe you can't. But I think it goes a long way to, to just listen to the people and, and provide feedback, even if you can't do it.
Karen Hill: You could also, you could also send out, you know, some sort of... If you send out an employee survey for anything else, or just maybe just specific to the 401k plan, you could do that as well and just ask for feedback. Do you have any suggestions? You know, are you happy?
Kim Moore: What, what could we do to make it better?
You know, those are all good open-ended questions and you know. It doesn't, doesn't hurt anything, usually isn't too time consuming and it shows that you care and I mean obviously this is a benefit plan that's important to you or you wouldn't provide it. So, it's a good way to you know, to show the employees that you want to make it the best benefit that you can.
That's reasonable, obviously. So we mentioned plan monitoring throughout this session. There's a few things that we want to talk about with plan monitoring. And we've, I don't want to spend a lot of time on this because we've done a lot of other podcasts around monitoring transactions, especially disbursements because that's where fraud generally occurs.
People are more interested in getting money, not giving you money, not giving you money. So usually it's a some type of distribution loan, etc. So we're not gonna spend a lot of time on that, but that would be one area of monitoring to consider. We mentioned payroll. Payroll is another area where if someone wants to commit a fraud you know, now they're not going to probably get millions of dollars, you know, in one fell swoop, but they can set up things to take a little bit at a time and you might not notice it.
So monitoring payroll. I know it's this sounds like a lot of work because you're running payroll all the time. A lot of people probably on your payroll.
Karen Hill: And it couldn't- might not be fraud either because like I said, well, I mentioned earlier where they they didn't raise the limits. I've also seen where they didn't put in the limits and then they ended up having to refund money because they withheld too much.
Kim Moore: Right.
Karen Hill: Yeah, they went over the IRS limit for the year and they had to refund. Participants generally aren't too happy about that.
Kim Moore: Yeah, exactly.
Karen Hill: Once they put they money away, you know, now they have to pay taxes on that.
Kim Moore: Well, and I mean, payroll is a big expense to most companies, so I mean, I think it's a good idea to put in, you know, just think about it. We're just making some suggestions here of things to think about to be proactive and that would be catching errors before they become big errors and costly errors. So something to consider.
Two areas I wanted to mention before we wrap up though here, is that there's been a lot of press coverage, a lot of litigation around investments and fees in 401k plans. So a lot of lawsuits around you didn't diversify the investment choices enough. Obviously in most 401k plans anymore, the participants are choosing their investments.
So if you've got an option, you know, a laundry list of investments for them of 20 different investment choices. It's a diversified lineup and I choose to put all of my money in, you know, equity type investments and the market takes a big downturn. That's not your responsibility as the plan sponsor or the plan administrator, plan trustee.
You offered options, the participant shows amongst those options and then it depends on what the market does. And that's on the employee. But if you're not offering a diversified lineup, if you're not looking at the investments, maybe you do have a diversified lineup, but those particular investments are performing poorly against peer investments.
Again, we're not asking you to compare a bond type fund to an equity fund. That wouldn't make any sense. But a bond fund to another bond fund, or to a bond index. If you're not doing those kinds of things and you're not documenting it you're leaving yourself open for a potential lawsuit by an employee by a group of employees.
You know, it can be a kind of class action type lawsuit. So it's an area that we always encourage people to pay some attention to. And get an investment advisor to help you because we're not all investment experts. Investments change. There's a lot going on. We're all busy. So the investment advisors, that's what they do for a living.
So it's worth a little bit of expense hiring someone like that, bringing them in. Meet with them once a year, twice a year, once a quarter, whatever you think is appropriate. Document those, those discussions. Make changes as needed from those discussions. That's very important. And then I'm not saying you're not going to get sued ever, but at least you're going to have some documentation you can present to help you defend yourself against those lawsuits.
Same thing for fees, and I've been seeing this one really ramp up. If you are charging your participant's fees. So if, if the... the company is paying the plan fees. This is not an issue. You can pay whatever you want. So you can have a very high end plan, a whole bunch of fees, and your company is paying that.
It's not getting charged to participants. You know, good for you. But if you are charging those fees back to the participants, and the participants feel like, "Hey I'm not taking compensation I could take as a salary or a wage. I'm having you put that in the plan and then the fees are eating up all of those dollars that I'm putting in the plan."
That's a lawsuit waiting to happen. And there have been some fairly significant lawsuits in this space with big companies. Not saying it couldn't happen for a smaller one too, but this has been an area really that... This kind of taken off. So it's an area that I would definitely ask you to take a look at.
Consider, again, bring in some experts, your investment advisor or your, your service provider too, should be able to help you with some benchmarking in this space. Definitely something to think about and consider.
Karen Hill: And this is, and when we're talking about fees, we're not talking about the fees that the participants might have to pay because they took out a loan or they requested distribution or loan maintenance fees.
Those aren't the types of fees that we're talking about. We're talking about the fees for actually maintaining the plan. And sometimes they're usually, I mean, sometimes they're supposed to break them out, but sometimes they're hidden.
Kim Moore: And it's not easy to analyze them sometimes.
Karen Hill: Right.
Kim Moore: Comparing across, you know, two or three plans isn't as easy as what you'd think.
And so that's why I say bringing in a specialist to help you with that is not a bad idea. And, you know, you don't have to do it every month or something. I mean, maybe once a year is plenty. But that is definitely an area that you could be proactive and it will probably be in your best interest to be proactive on. So Karen, I think we've, we've spent quite a bit of time talking about this topic.
Any last thoughts before we wrap up?
Karen Hill: Just that doing- being more proactive and getting ahead of a lot of these things will be beneficial for you in the long term on your plan. The compliance calendar, I think, is a very good idea because I've, I, there's many times when I've seen where people, they, they get things in late and then they're- everything ends up running late and it can cause issues.
Kim Moore: Yeah, and and it's, it's very difficult to catch up. It's like anything else. You start getting behind. It's very difficult. And you get years behind and we have a lot of experience seeing that on the other side and it's very difficult to get out those things resolved and usually very expensive. Very expensive. And very time consuming as well.
I mean, time is money, so you don't want to be spending time fixing problems from years ago. So I think it's definitely a very important topic. I know it sounds like a lot of work, but a little bit of work now can save you a whole lot more work later on. Being proactive versus reactive. So, I'm hoping that that gave you some, some food for thought as you're getting ready to get going on this year's plan administration for your 401k plan.
Again, I'm going to throw out my email address: letter K. Then M O O R E at Anders with an S C P A dot com. Feel free to reach out if anything piqued your interest from today's conversation or if you'd just like to talk about your 401k plan in general or maybe you need a 401k plan audit, we're here to help at Anders.
So thanks for listening and we'll catch you in next month's podcast. Thank you.
Narrator: Enjoy this podcast? Visit our website at Anders CPA. com slash 401k to get more tips and strategies for achieving 401k audit success. We're here to be a resource with ever changing rules and regulations.