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| by Lance Wallach |
401k IRS audits be careful - The Flooring Contractor Summer - Has Your 401k or Other Retirement Plan Been Reviewed? By Lance Wallach. Government officials now expect 401(k) plan sponsors to conduct periodic due diligence reviews. With respect to their 401k or other retirement plans, the problem is that most sponsors (owners) do not have the in house resources to do so.
This is not something that 401(k) plans historically did. On the heels of the recent mutual fund scandals, though, Labor Department officials indicated that sponsors had a duty to periodically investigate plans and benchmark funds and fees.
Baby boomers are now retiring, and their 401(k) accounts often are their primary source of retirement income. A sponsor potentially could be liable for less than stellar 401(k) account growth if employees can claim that he did not meet his fiduciary duties.
Trusting the reputation of a major mutual fund company is not enough anymore. Sponsors must investigate and compare their plans to other programs at least every two to five years, as well as demonstrate that their plan expenses are in line with what others are paying. Blind trust is not prudent. You need a process, and you need to document that process.
Baby boomers are now retiring, and their 401(k) accounts often are their primary source of retirement income. A sponsor potentially could be liable for less than stellar 401(k) account growth if employees can claim that he did not meet his fiduciary duties.
Trusting the reputation of a major mutual fund company is not enough anymore. Sponsors must investigate and compare their plans to other programs at least every two to five years, as well as demonstrate that their plan expenses are in line with what others are paying. Blind trust is not prudent. You need a process, and you need to document that process.
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