Requirements of Pre Approved Retirement Plans
Many companies offer pre-approved retirement plans as part of their employee benefits. Document providers such as a financial institution or benefits practitioner are the ones that sell pre-approved retirement plans to employers. The document provider is also called as a “pre-approved plan sponsor” who ensures that the IRS-approved plan is available to adopting employers.
Retirement Plans as Employee Benefits
Retirement Plans is an important attribute in every employee’s professional life cycle. Employee benefits such as a pre-approved retirement plan gives them a form of security in knowing that their future is thought of and cared about by their employers. Furthermore, employers hold the responsibility of ensuring compliance of pre-approved retirement plans.
In connection with this role, here are a few tips to guide you in making the plans legally compliant:
1. Select a document provider. It will be helpful to probe before choosing a plan. Probing will help identify which service agreement to consider, who determines any nondiscrimination testing or if it is required. More questions about product features and services that the plan offers should be asked in this stage.
2. Understand the plan type. Compare options available before choosing a pre-approved retirement plan. Also, ensure that you understand the terms and context of the plan type chosen as it is a must to adhere to regulations that was already pre-set.
3. Adopt agreement choices. The adoption agreement is an employer-specific document attached to the plan. Most plans would allow selecting alternative plan provisions, such as when the employee participates in the plan or when employer uses contribution formulas. Selected items in the adoption agreement become the legal terms of the plan and you are bound to follow them while operation takes place.
4. Sign effective date. The plan is not activated until signature is affixed and the document is dated.
5. Start saving. Begin operating your plan.
Archer Jordan’s Retirement Plans Meets ERISA
Our Arrow Contractors Trust features specialized retirement plans that meets the strict requirements of ERISA. It also meets the compliance standards for managing employee benefits that includes having a secure and correct placement of fringe contributions. Archer Jordan created an efficient and affordable retirement program catering the customized needs of each individual employee.
For more information and guidance, you may check on the FAQs on retirement plans at www.irs.gov/retirement. This way, you can decide if a Pre-Approved Retirement Plan is for you.
