How to Effectively Manage Your Employees’ Retirement Plan
Starting an employee benefit plan and considering a 401k can be challenging. Sponsoring a 401k, which is a defined-contribution retirement savings plan sponsored by an employee, requires knowledge of the existing regulations surrounding prevailing wage and benefit requirements. However, with the right guidance and with a plan in mind, you can successfully and effectively provide a retirement plan to your hourly workers and other employees.
One of the first concepts you need to understand is fiduciary responsibility. A fiduciary duty is the highest standard of care. Simply put, a fiduciary is someone who has a legal obligation to act in the best interest of another. It’s important to know this for the sake of compliance and security of the retirement plan.
Tips to Starting a 401k Retirement Plan
Here are some tips you should keep in mind:
- Define the extent of fiduciary responsibilities clearly. In a defined-contribution plan, the balance of your employee is determined by the contributions towards the plan and also the performance of the investments of the plan. As the employer, you are usually not required to make contributions to the plan, though there are some set-ups with a profit-sharing feature.
- Ensure compliance with the law in terms of schedule. The deposit of contributions to the plan should be in compliance.
- Monitor your benefit plan’s service providers and all related transactions. Make sure to also review your plan operations regularly, in order to make adjustments if necessary
- Effectively provide plan and investment information to your employees. Qualified employees, or participants, should have the information needed to make investment decisions and to manage their account.
- Carefully hire a third-party service provider if you want to do so. If you are looking at hiring a third-party service provider, ensure that you provide them the same information, that you consider the relative costs, and that you document the process.
- Check that those handling your plan funds and property have a fidelity bond, as a form of insurance protection for you.
Issues with compliance with the law can mean intervention from the Department of Labor’s Voluntary Fiduciary Correction Program, or the Department of Delinquent Filer Voluntary Compliance Program.
Work with ARCHER JORDAN for your Retirement Plan
If you are looking to protect your interests as a prevailing wage contractor and at the same time provide benefit plans for your hourly workers, you need to work with a professional and competent team. Here at ARCHER JORDAN, we put our decades of experience into becoming a reliable third party administrator providing fringe benefits to government contractors and hourly hires.