| What Does Retirement Plan Sponsorship Involve? Sponsoring a 401(k) or other qualified retirement plan involves setting up and maintaining the plan so that it meets all legal requirements. There are numerous Federal laws that govern qualified retirement plans - from inception to termination - so, as a plan sponsor, you must understand and comply with myriad rules and regulations. Many of the tasks involved in administering a plan require the preparation of and submittal of highly technical documents. Others involve actuarial calculations, data analyses, or financial analyses. There are four basic phases to the life cycle of a retirement plan: The following sections describe the typical tasks for each of these phases. Don't let the daunting task list deter you - remember, REPTECH can help you at every step of the way! During this first, inception stage, you are analyzing data to determine the costs and benefits of various 401(K) or other qualified retirement plan options, so that you can decide if it makes sense for your company to offer a plan. Typical tasks include the following: - Establishment of company goals and requirements for a retirement plan (for example, what you want to accomplish and how much the company can afford to spend).
- Collecting of data about the company financials, its employees, and existing benefits programs.
- Analysis of employee data and estimation of costs of various plan options, such as a 401(k) vs. traditional profit sharing or money purchase pension plan.
- Selection of a plan option.
- Establishment of specific company requirements for the plan, such as eligibility requirements, vesting schedules, benefit formulas, early and late retirement benefits, and death and disability benefits.
- Design of your selected plan to meet the established company requirements.
- Selection of a provider for the investments to be included in the plan.
 back to top During this phase of the retirement plan life cycle, you bring the plan into existence. Typical tasks include the following: - Adoption of the plan by authorized parties of the company (for example, the Board of Directors or company officers).
- Designing and drafting the Summary Plan Description (Employee Handbook).
- Preparation of documents for the IRS to obtain a ruling on the qualified status of the plan.
- Preparation of enrollment and investment direction forms for plan participants
- Delivery of plan materials and explanatory information to plan participants back to top
This is the maintenance phase of the retirement plan. You will perform these tasks on a regular basis throughout the life of your retirement plan. Some tasks are performed on an annual basis; others are performed regularly throughout the year. Typical tasks include the following: - Nondiscrimination testing.
- Analysis of payroll census data to determine eligible participants and to calculate benefits based on the data.
- Allocation of employer contributions, investment earnings, forfeitures, voluntary after-tax contributions, and rollover contributions.
- Analysis of the plan's funding to determine if it meets the desired objectives.
- Actuarial cost analysis to determine the employer's tax deductible contribution.
- Preparation of annual reports required by the Department of Labor and the Internal Revenue Service.
- Preparation of distribution packages in the event of death, disability, retirement, or termination of a participant's employment.
- Amendment of plan if required by changes in the law or requested by the client.
- Preparation of plan-level accounting statements.
- Preparation of individual account statements. back to top
Retirement plans can be terminated for a number of reasons, such as company dissolution or corporate mergers or acquistions. During a plan termination, you will perform the following tasks: - Preparation of any required amendments to the plan prior to termination.
- Preparation of minutes adopting amendments and terminating the plan.
- Preparation of required notices to participants.
- Preparation and submittal of documents required by the PBGC (Pension Benefit Guaranty Corporation) and IRS.
- Preparation of required forms to distribute assets to plan participants and beneficiaries. back to top
| 
