Employer Responsibilities

Plan Sponsor Requirements

The retirement plan and trust documents establishing the plan include the names of the plan administrator and plan trustee(s). The plan administrator has the legal responsibility for running the plan and is often the employer sponsoring the plan. More often than not, an outside third-party administrator (TPA) will be hired to perform many of the administrative tasks required under the plan document, even though the plan administrator remains legally responsible for all plan activities.

Many 401(k) plans allow participants to direct the investments of their accounts, which can alleviate some of the investment liability from the trustee if participants are given sufficient information and control over their investments. However, the trustee is still responsible for monitoring the appropriateness of the available investment choices.

Annual Limits for 2016

  • Compensation: $265,000
  • Defined Contribution Plan Contribution: $53,000
  • 401(k), 403(b), 457 Salary Deferral: $18,000
  • 401(k), 403(b), 457 Salary Deferral, if 50 or Older: $24,000
  • SIMPLE IRA Deferral: $12,500
  • SIMPLE IRA Deferral, if 50 or Older: $15,500
  • SEP IRA Contribution: $53,000
  • IRA Contribution: $5,500
  • IRA Contribution if 50 or Older: $6,500

As a plan sponsor, some of your fiduciary responsibilities include:

  • Providing investment oversight and fee disclosure
  • Providing participant statements
  • Completing annual census data requests
  • Providing summary plan descriptions and safe harbor notices
  • Following salary deferrals and deductions, and making deposits to the plan assets in a timely manner
  • Providing information about investment options and completing investment allocations
  • Retaining beneficiary forms
  • Meeting the bonding requirement
  • Staying current on annual plan limits
  • Making employer contributions on or before the due date
  • Overseeing the plan
  • Reviewing and providing 1099-R distribution forms
  • Assisting with participant loans, distributions and hardship withdrawals
  • Approving and filing completed Form 5500 tax filing
  • Notifying newly eligible employees of their benefits and right to participate