All 401(k) Plans are governed by basic documents and agreements; that's why it's very important that you keep your Plan documents current. Examples of these items can include:
- Basic Plan Document
- Adoption Agreement
- IRS Opinion/Determination Letter
- Summary Plan Description
- Administrative Agreement
- Trust or Custodial Agreement
- Group Annuity Contract
All of these documents (and any additional critical documents for the Plan) should be maintained in a permanent file by the Employer that sponsors the Plan. Although the Plan’s service provider will also maintain copies, it is the responsibility of the Plan to ensure they have current, valid signed copies. The documents should be available for reference by employees involved in Plan Administration, also, to ensure all important provisions are being properly addressed.
In the event of a Plan audit by a certified public accountant, the Department of Labor, or the Internal Revenue Service, signed copies of all relevant documents will need to be provided. We recommend all Plan Sponsors review their files periodically to ensure these documents are available and that the copies maintained are signed by all required parties. Documents that have not been signed will not be accepted as executed documents by the regulatory authorities.
In addition, new upcoming requirements for 401(k) audits will require the auditor to obtain signed copies of these documents. Maintaining all versions of the documents (from the inception of the Plan) is also a good idea. These various versions may be needed to justify actions taken in previous years in the event of a dispute by an employee, employee group or a regulatory action.
It’s vital that you hire a trusted auditor when it’s time for your plan's audit. At Summit CPA we specialize in retirement plan audits. We have the ability to offer assistance entirely off-site with little or no distraction to your daily office routine. We also offer flat-fee pricing so there are no surprises on your bill when the job is complete. For assistance contact our office at (866) 497-9761 to schedule an appointment.