Responsibilities of Employers as 401K Fiduciaries
The security of your prevailing wage employees’ 401k plan depends on how well you understand your fiduciary duties and your compliance with the laws and regulations that govern prevailing wage. We list down some helpful tips below to get you started.
- When selecting your plan fiduciaries, always make sure that they are clear about how wide their fiduciary responsibilities are.
- If your prevailing wage workers choose to make their own investment decisions, make sure that you have given them information regarding the plan and investments. It should be substantial enough for them to make an informed decision related to managing their own accounts. Sufficient knowledge is needed in order to exercise control in their investment decisions.
- Always be updated in the schedule of paying contributions to the plan of your prevailing wage workers. Check if it is compliant with what is stated in the law.
- Before hiring third party service providers, make it a point to check several providers. Try to know if the fees they charge can be justified by the type of service that they provide.
- Ensure that the recruitment process is well-documented.
- Adequately prepare to monitor the service provider of your retirement plan.
- Identify parties that are interested in the retirement plan. Make sure that your transactions with them are tracked.
- Be well-informed about the major exemptions specified in the ERISA that allow having transactions with parties of interest. Pay attention especially to those who are vital for plan operations including recruitment of service providers and making plan loans for them.
- Go over your retirement plan document to see if there are updates that should be done. If a plan was amended, make sure that the participants have a copy of the latest SMM or SPD.
- Check if the prevailing wage worker who own plan funds or plan properties also own a fidelity bond.
Fulfill your fiduciary duties to your Prevailing Wage Contractors with Help from ARCHER JORDAN
A lot of people have the misconception that they can rely on their salaries forever. They fail to get for themselves a retirement plan that will make their golden years more convenient. Employers are vital in preparing for the retired life of many prevailing wage workers.
If you are an employer looking for assistance with the 401k plans of your prevailing wage workers and hourly employees, contact our team at ARCHER JORDAN. We are happy to offer sound advice on managing employee retirement plans.