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Master and Prototype Plan Sponsors - Responsibilities and Tips - Tip #5

5. Encourage adopting employers to do an annual plan check-up

Tip

Potential Concerns

Encourage adopting employers to do an annual plan check-up

  • Adopting employer may miss an opportunity to self-correct or voluntarily correct plan form and operational errors
  • Financially troubled adopting employer does not take action to:
    • amend the plan,
    • freeze the plan, or
    • stop minimum funding deficiencies, risking incurring excise taxes

The easiest way you can prevent noncompliance is by encouraging the adopting employer to perform an annual check-up of their plan (for example, review their plan document and operational practices and procedures). You can use Employee Plan’s check-up tools. You can also use this time to discuss recently updated materials and answer questions.

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Page Last Reviewed or Updated: 21-Mar-2014