Most benefit plan problems are administrative rather than design flaws. A plan can be well drafted and still fail because deferrals were deposited late, a vendor applied the wrong compensation definition, a Form 5500 was filed with errors, or nobody followed the claims procedure on a denied appeal. The employer remains responsible for these failures even when a vendor made them. We work with plan sponsors, administrative committees, and HR and finance teams to set up procedures that keep a plan in compliance, review what the vendors are actually doing, correct errors through the agency programs, and respond when the DOL or IRS comes asking.
Reporting, Disclosure, And Deadlines
The calendar drives much of the work. Form 5500 is due on the last day of the seventh month after the plan year ends, extendable by two and a half months with Form 5558, and defined contribution plans with 100 or more participants with account balances generally need an independent audit. Participants must receive SPDs, summaries of material modifications, annual fee disclosures under DOL Regulation 2550.404a-5, and plan-specific notices for safe harbor, automatic enrollment, and qualified default investments. Health plans have their own schedule of notices. Late or missing filings carry daily penalties, but late Forms 5500 can usually be brought current at reduced cost through the DOL's Delinquent Filer Voluntary Compliance Program.
Fiduciary Process And Vendor Oversight
ERISA does not require fiduciaries to get every decision right, but it does require a prudent process. That means a written charter or delegation that says who the fiduciaries are, regular meetings with minutes, an investment policy statement that is actually followed, and periodic review of fees and service quality. Under DOL Regulation 2550.408b-2, covered service providers must disclose their compensation before the contract is signed, and a fiduciary that accepts an arrangement without reviewing those disclosures risks a prohibited transaction. We review recordkeeping, advisory, and TPA agreements from the plan's side, negotiate fee, data security, and indemnity terms, and set up the committee structure and calendar that turn good intentions into a record.
Corrections And Late Deposits
When something goes wrong, the right correction program depends on the error. Late deposits of employee deferrals and loan repayments are prohibited transactions. They require deposit of lost earnings, can be corrected under the DOL's Voluntary Fiduciary Correction Program, which now includes a self-correction component for smaller amounts, and, unless the program's class exemption applies, call for an excise tax filing on Form 5330. Operational and document failures in qualified plans go through the IRS Employee Plans Compliance Resolution System, using self-correction where permitted and a Voluntary Correction Program submission where it is not. We identify the failure, calculate corrective contributions, choose the program, and prepare the filing and the documentation an auditor would later expect to see.
DOL Audits And Claims Disputes
An EBSA investigation usually begins with a letter requesting plan documents, minutes, service agreements, fee disclosures, and payroll and deposit records for several years. The way a sponsor responds shapes the scope of the investigation and whether it ends with a closing letter or a demand for corrective action and civil penalties under ERISA Section 502(l). We manage the production, the interviews, and negotiations with the investigator and the regional office. IRS plan examinations follow a similar path. We also represent administrators in benefit claim disputes, where the claims procedure regulation at 29 C.F.R. 2560.503-1 sets deadlines and content rules, and where a procedural failure can cost the plan deferential review in court.
Habits That Prevent Problems
Plans that stay out of trouble tend to share a few habits. They reconcile payroll to plan contributions every pay period and track deposit dates. They compare the plan document's definitions of compensation and eligibility to what payroll actually does at least once a year. They keep a compliance calendar for Form 5500, notices, testing, and restatements. They hold committee meetings on a schedule and keep minutes that show what was reviewed. They benchmark fees every few years and get competitive bids. They decide claims and appeals within the regulation's deadlines and in writing. None of this requires a large staff, but it does require someone to own it and counsel to review it periodically.
