Year-end deadlines are critical for having a compliant 401k plan. Plan sponsors and administrators must ensure their retirement plans comply with all relevant regulations, or they may face legal and financial repercussions.

The IRS has established deadlines that must be met to keep the 401k plan in good standing. All plan sponsors and administrators should keep track of their compliance deadlines, including filing Form 5500 on time, ensuring timely deposits into participant accounts, and making necessary plan amendments.

Compliance checklist

Plan administrators and recordkeepers must ensure all required documentation is complete and accurate. Here is a checklist of year-end compliance requirements for your 401k:

  1. Make qualified plan amendments: Plan administrators must review all plan documents before year-end to check for any changes required, as per ERISA or IRS. To ensure that retirement plans comply with federal law, a series of tests must be conducted annually. Any discretionary plan changes for the year must be amended by December 31. The adoption and execution of any plan changes from previous years must also be reviewed.
  1. Correct plan failures: Plan administrators should identify operational or coverage failures before year-end. It can include failure to deposit employee contributions timely, document loan defaults, and verification of nondiscrimination testing. The plan fiduciary should conduct an annual review of plan investments to confirm that they meet the initial goals determined when selecting them. This includes examining the fees, risk-adjusted returns, and performance relative to a benchmark index. Plan administrators must adopt all required resolutions before December 31, including any discretionary provisions identified in the plan document.
  1. Send annual plan notices: Notices must be sent to all plan participants, beneficiaries, and eligible employees detailing the current year’s plan changes. It includes amendments or updates to the plan document, a Summary of Material Modifications (SMM), and fee disclosures. Depending upon the applicability, a 401k safe harbor notice, a qualified default investment alternative notice, and an automatic enrollment notice may also be issued to DC plan participants by December 1.
  1. Process participant payments and send disclosures: Plan administrators ensure that all employee contributions are properly processed and allocated to the designated accounts on time. Participants must receive the Summary Annual Report (SAR) by December 15. According to the new DOL guidelines, each participant must receive New Annual Lifetime Income Disclosures.

Keep up with outsourcing

Outsourcing 401k year-end compliance tasks to experienced professionals can have multiple benefits. It ensures that your plan complies with the law and avoids costly penalties. By outsourcing, you save time and money and reduce the seasonal administrative burden for your staff.

You also benefit from expert advice on any changes in regulations or laws related to 401k plans so that your organization is always compliant. Furthermore, skilled professionals can help streamline processes making them more efficient and cost-effective.

Congruent Solutions provides 401k plan administration services to relieve your burden. Our specialized professionals with years of experience managing and overseeing complex compliance tasks work closely with you to meet your organization’s specific needs. We also keep abreast of changes in regulations by DOL, ERISA, and IRS to ensure that you remain compliant.

We help employers reduce the complexity of their 401k compliance and operations by providing comprehensive solutions.

  • Ongoing monitoring and review of plan documents
  • Maintenance of required plan records
  • Filing and submission of required forms (Form 5500s, IRS filings, etc.)
  • Assistance with preparing for DOL audits or other governmental inquiries
  • Periodic reviews to avoid potential violations 

Our cloud-based retirement plan administration platform offers comprehensive 401k plan management and compliance assistance. Contact our team today to take care of your year-end 401k compliance while you focus on the upcoming holidays.

Back to Blog Home