Maintaining good documentation of the setup and operation of a retirement plan is critical. As a 401(k) plan sponsor, it is your responsibility to maintain good documentation and keep it in-house.
WHAT IS A FIDUCIARY FILE?
A fiduciary file is the group of documents that you should maintain as the 401(k) plan sponsor. There could be 25 to 30 different documents that you should be able to provide to an auditor. Examples of these documents are the plan adoption agreement, meeting minutes, fee review documents, and 401(k) plan advisor agreements.
WHY SHOULD EVERY 401(k) PLAN SPONSOR HAVE A FIDUCIARY FILE?
If you are the subject of a government audit, you should be able to produce the requested plan documents. Stating “my recordkeeper holds these documents for me” won’t help your case. If you don’t have the documents on hand when they are requested by the government auditors, it could lead to further investigations and red flags about your plan’s operations. If you can’t show evidence of your due diligence, the government will assume that you haven’t done it.
Having a complete fiduciary file will also help ensure compliance with regulatory obligations and create a firewall to defend against employee complaints and sanctions.
WHAT DOCUMENTS SHOULD BE IN A FIDUCIARY FILE?
Our team has created a 401(k) fiduciary file checklist (download below) that outlines each document you should include in your in-house fiduciary file.
There are three main categories of documentation that you will want to include in your fiduciary file. They are administration & reporting, investment due diligence, and service provider agreements.
Feel free to download the checklist below and use it to create your own 401(k) fiduciary file. When it comes time for an audit, you will be sure to thank us!
401(k) FIDUCIARY FILE CHECKLIST
WANT MORE GUIDANCE ON YOUR COMPANY’S 401(k) PLAN?
Enter your email below and we’ll keep you updated!
Did you enjoy this post? Please share it!
Recent Blog Posts
Succession Planning: 10 Things You Should ConsiderJuly 29, 2019
Let’s face it: you’re not going to work forever. At some point, you’re going to want (or need) to pass the reins of your business ...Read More
401k Plans Must Pass Nondiscrimination TestingMay 8, 2019
Under IRS regulations, 401k plans must pass certain nondiscrimination tests in order to avoid fees, required withdrawals, additional employer contributions, or the cancellation of a ...Read More
Glass Jacobson Renews CEFEX CertificationApril 12, 2019
Glass Jacobson has renewed its investment advisor certification with the Centre for Fiduciary Excellence, CEFEX, for another year. An Fi360 company, CEFEX certifies investment advisory ...Read More