RETIREMENT PLAN INSIGHTS

According to the April 2012 issue of Investment Advisor magazine, Columbia Management Learning Center warned plan sponsors in a recent white paper that they have a "fiduciary responsibility to keep their plan in compliance with DOL rules and regulations at all times."

This comes as no news to the vast majority of plan sponsors; but,
because of the increased number of DOL enforcement staff, the white paper goes on to say, "the chance that the DOL could audit your plan is increasing...There is every indication the DOL is escalating audits of small plans."

One interesting point noted in the paper was that during 2010, the DOL audited more than 3,100 plans and found that more than 73% of the plans were required to restore losses to the plan or take another type of corrective action to correct plan deficiencies.  And, there was more news in the paper: 96 individuals (e.g., plan officials, corporate officers and service providers) were indicted for offenses related to their plans.

The good news, however, was that a very small percentage of plans actually have true "bad guy situations"; the majority of violations generally come from oversight, errors and omissions by plan sponsors.  Ask most plan experts and they might tell you the causes were legal-speak for procrastination, apathy, and denial.

Many plan sponsors, particularly in the small plan market, need to be more proactive; and, what few realize is that it's actually easier - and often less expensive - than what they're doing now!