Retirement savings plans are an ubiquitous employee benefit that have many regulatory and compliance requirements.
As plans reach over 100 employees, annual 401(k) audits are required. According to the US Department of Labor, a small “fraction of employers abuse employee contributions.” The U.S. Department of Labor Employee Benefits Security Administration issued 10 warning signs that pension contributions are being misused.
Ten Warnings Signs:
- Your 401(k) or individual account statement is consistently late or comes at an irregular interval.
- Your account balance does not appear to be accurate.
- Your employer failed to transmit your contribution to the plan on a timely basis.
- A significant drop in account balance that cannot be explained by normal market ups and downs.
- 401(k) or individual account statement shows your contribution from your paycheck was not made.
- Investments listed on your statement are not what you authorized.
- Former employees are having trouble getting their benefits paid on time or in the correct amounts.
- Unusual transactions, such as a loan to the employer, a corporate officer, or one of the plan trustees.
- Frequent and unexplained changes in investment managers or consultants.
- Your employer has recently experienced severe financial difficulties.
If you have compliance questions on your employee benefit plan, please contact the SKR+CO audit team.
