Most companies have inclusion and diversity policies in their companies especially related to Human Resources, hiring and evaluation/promotion, and cultural aspects. However, have you considered inclusion and diversity related to your 401k Plan? You may ask what does that means and how do I implement new procedures in this area?
Including diversity and inclusion considerations in your Plan communications and activities can help with Plan participation levels and ensure all employees are treated fairly with regard to eligibility and the application of Plan provisions to all employees.
Things to consider in this area:
- Target specific employee groups that may not be participating at a high level. Ensure when you review the Plan provisions, you consider all employee groups. Discuss options with employees and take their concerns and desires into account when making changes. Consider the different stages of life that your employees are in. Desired plan provisions and investments will change for a younger employee with limited family obligations compared to someone with young children or someone close to their retirement.
- Review committees that monitor the Plan. Investment Committees, Benefit Committees, or 401k Oversight Committees are filled with different employees. Ensure the committees include diverse makeups. Do regular reviews in this area to ensure the committees include representatives from the employee groups and that those selected for the committees are representative of the types of employees you have in your company.
- Consider evaluating the diversity and inclusion policies of your service providers. You may include this item in your provider evaluation criteria. Consider implementing a scoring system to assist in the evaluation and to verify no bias has been introduced into the process.
Diversity is important and the right thing to do as an employer. This extends to your 401k Plan and other benefit plans. A little time in this area can ensure your benefit plans meet the needs of all employee groups and they are responsive to changes in the needs of those groups over time.
At Summit CPA we specialize in retirement plan audits. If you would like to discuss our audit process in more detail or need an audit contact our office at (866) 497-9761 to schedule an appointment. We can help you navigate the world of the 401(k) audit as proficiently as possible. We also offer off-site assistance and flat-fee pricing so there are no surprises when the job is complete.