Employers may wish to check their human resource software to ensure it has any updates needed to administer 401(k) plans under the new federal guidelines scheduled to go into effect on July 1.
Information on the upcoming changes may need to be distributed to employees participating in a company's 401(k) program. All parties should be prepared to comply with coming fee disclosure requirements, which mandate that employers inform participants of fees and expenses associated with the programs by August 30, 60 days after the deadline for service providers to disclose information plan fiduciaries and administrators.
HR compliance with the change also requires that the first quarterly statement be provided to each participant by November 14, outlining fees and expenses deducted during the quarter to which that statement applies. Employers sponsoring 401(k) plans may also wish to check that their plan's service provider is prepared to make disclosures on time, since failure could result in delays and make compliance difficult.
Sponsors can prepare by ensuring that communication and coordination with service providers are sufficient to share information and distribute it to participants, BLR notes. Setting up lines of communication in advance should improve the speed with which any errors can be corrected. If complete information cannot be obtained, then the company can prepare to contact the Department of Labor and avoid the consequences of non-compliance.
