Managing a construction company’s retirement plan is no easy task. The rules are complicated and the penalties can be severe. Far too often, however, upper management doesn’t understand this dynamic and designates a person that is not technically-equipped to handle this serious responsibility.
Employers often hire a myriad of advisors to help them administer their plan, but these advisors do just that – help. As the plan administrator, the employer is responsible for the plan unless they pay a hefty fee to offload that responsibility, which makes it so surprising that many employers give this responsibility to the wrong person in their organization.
Some of the most important aspects of plan management are:
Congratulations! March 15th has come and gone and your construction company’s 401(k) compliance testing is done and refunds have been issued. Now you can relax! Or can you? You still need to make sure your Form 5500 is filed for last year. Failing to file on time or failing to file the Form 5500 with audited financial statements, if required, can be quite costly. Don’t let this deadline sneak up on you.
Form 5500 must be filed electronically by the last day of the 7th calendar month after the plan year-end. For calendar year 2013 plans, this is July 31, 2014. Filing an automatic extension, Form 5558, extends the deadline an additional 2 ½ months, to October 15th for calendar year end plans. A penalty of up to $1,100 a day can be assessed for each day a plan administrator fails to file a complete and accurate return!
That deadline may seem far away, but if you are a large plan filer (generally more than 100 participants at the beginning of the plan year) and you must file audited financial statements with your Form 5500, you need to start the process
It’s the time of year that construction companies start thinking again about the audit of their benefit plan. If you are happy with the service you receive, and your audit goes smoothly and the deadline is met, that’s great! However, if you typically just go through the motion of engaging the same firm you have always used, you may be doing yourself a disservice. Be sure to ask yourself these questions:
The Internal Revenue Service has announced the 2014 cost-of-living adjustments for various limits affecting employee benefit plans. The more common limits are detailed below for 2013 and 2014.
If you have any questions about how these limits apply to you, please contact Mark Flanagan of Aronson’s Employee Benefit Plan Services Group at 301-231-6257.
The Obama Administration’s recently released fiscal year 2014 budget contains several provisions that are less than advantageous as they relate to retirement plans. These provisions are by no means final, however, as Congress has yet to work its way through them.
The proposed budget contains two specific provisions that would greatly reduce the attractiveness of retirement plans to small businesses: