IRS studies spotlight common 401(k) compliance issues

Since their inception more than 30 years ago, 401(k) plans have become the prevalent private retirement program in the country, with more than 500,000 plans covering approximately 60 million U.S. workers. Along with social security, the plans form a key element of the nation's retirement system. For that reason, it's vital that they operate prudently and in accordance with the requirements of the Employee Retirement Income Security Act (ERISA). Moreover, since the Internal Revenue Code confers special tax benefits on 401(k)s, the IRS wants to ensure that plans comply with applicable tax rules. The agency's recent enforcement efforts include a 401(k) compliance check questionnaire and a series of projects focused on specific plan compliance issues. Employers sponsoring 401(k) plans need to be aware of these hot-button issues and address them before IRS auditors come calling. Read More...