Is your retirement plan ERISA compliant?
Many people don’t realize that their retirement savings plan is governed by regulations detailed in the Employee Retirement Income Security Act, which is widely known by the acronym of ERISA. However, plan sponsors know how to ensure compliance with ERISA, right? Sadly, too many admit that they don’t.
According to a recent report by the Callahan Investment Institute, approximately 14 percent of those who sponsor defined contribution plans aren’t certain whether their plans are ERISA compliant. That’s up from 9.3 percent two years ago.
There is some good news, however, in that these plan sponsors seem to be taking action to help ensure their compliance, either on their own or through independent parties such as attorneys or consultants. Over 83 percent reported that they did so within the last year. Over 61 percent said that they personally reviewed their plans for compliance issues. Further, the percentage of plan sponsors who responded to the survey who don’t know if their plans’ investment policy statements has dropped from 4.2 percent in 2014 to 2.8 percent.
This reported information seems to be backed up by hard data. The percentage of plans in compliance with ERSIA is up slightly to over 81 percent from just under 80 in 2014.
Most employees have no way of knowing whether their retirement plans are ERISA compliant. They rely on their plan sponsors to ensure compliance. However, if you find out that your fellow plan members are taking part in a lawsuit against the plan sponsors, or that those sponsors are being investigated, it’s essential to pay close attention. Your retirement savings may well be at stake.
Source: BenefitsPro, “Plan sponsors concerned about ERISA compliance,” Marlene Y. Satter, Jan. 15, 2016