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Explanations of the Top Ten Tips to Prepare for an Efficient Audit - Be Prepared to Explain Operation of the Plan

In addition to knowing the terms of the plan, those involved with administering the plan must be aware of the paperwork and decisions needed to properly operate the plan. Such individuals must ensure that proper documentation of plan operations is maintained and be readily able to describe various procedures, including:

  • Preparing and maintaining updates/amendments of the plan document;
  • Notifying employees of plan eligibility;
  • Providing and accounting for deferral election forms, if applicable;
  • Informing participants of accrued benefits under the plan (at least annually);
  • Providing and securing proper election and consent forms before making distributions;
  • Communicating loan or hardship distribution procedures and documentation requirements to plan participants (if the plan permits loans or hardships);
  • Preparing and filing Forms 5500; and
  • Preparing and filing Forms 5330, when necessary.

The above list is not all inclusive. It is intended to highlight major areas of plan and trust operations that require additional documentation beyond the plan document.

Page Last Reviewed or Updated: 11-Feb-2015