Frequently Asked Retirement Plan Questions in Q4

Author: Eric Quella

Client Relationship Manager Supervisor

The work associated with retirement plans involves a yearly cycle of various steps and tasks.  Now that we’re past the October 15th deadline for filing calendar year 5500s, it’s natural to wonder what comes next. Let’s look at some of the frequently asked retirement plan questions we get this time of year.

Our 5500 was due October 15th and it hasn’t been filed yet.  What do we do?

If your Form 5500 hasn’t been filed on time, you are probably still able to file the return under the Delinquent Filer Voluntary Compliance Program (DFVCP).  Your 5500 should be filed with the DFVCP box checked as soon as possible.  Once the 5500 has been filed in this manner, completing the DFVCP is possible by paying a penalty.  The penalty amount depends on a few variables, including small versus large plan filers.  In addition, this program may not be allowed if you have already been contacted by the DOL about not filing.  So, it’s important not to delay this process if you didn’t file on time. 

Our 5500 has been filed.  What comes next?

Two items should be completed before the end of this year: Required Minimum Distributions (RMDs) and Annual Notices.  RMDs may be needed if you have participants in the plan with a balance who are 70 ½ years old or older at any time in 2019.  RMDs may not be required, depending on your document provisions and the employment status of your qualifying participants.  If you’re a Goldleaf Partners client, contacting your Relationship Manager is the best way to know if an RMD must be completed.

Annual notices should be sent between 30 and 90 days prior to the beginning of the plan year.  These include items such as safe harbor notifications, fee disclosures, auto-enrollment notices, and more.  Annual notices are generally provided to all eligible plan participants, and plan sponsors can expect to receive these from recordkeepers and/or their TPA, if they have one.

Is there anything I should do to prepare for the end of the plan year?

There could be.  If you’re thinking of adding safe harbor provisions or changing the safe harbor provisions already in your plan, then yes. Annual notices include safe harbor contribution methods, so if you’re making changes, they should be made as soon as possible. This way, you’re still able to send notices more than 30 days prior to the start of the new plan year.  Therefore, if you’re going to make changes, you should make them now, before it’s too late.

I have forfeitures to use in the plan, how and when should these be used?

Forfeitures should be used by the end of the year following the year of the forfeiture.  This means any unvested participant balance that was moved to the forfeiture account in 2019 should be used in 2019 or 2020.  Depending on plan document provisions, forfeitures can be used to offset company contributions to the plan or plan administration fees.  If you’re a Goldleaf client, you can contact your Relationship Manager for more information to help you determine the best use of your forfeiture account this year.