Employee benefits are an important part of a company’s strategy to attract and retain talent. Benefits administrators need to ensure they are adhering to the regulations outlined in provisions such as the Employee Retirement Income Security Act of 1974 (ERISA). Plan administrators can avoid benefit plan disasters and costly fees associated with mistakes by taking several proactive steps regarding compliance with plan documentation.
Review and Understand Plan Documents
Two of the most common mistakes made in administering retirement plans are the failure to deposit contributions promptly and/or delaying enrollment of eligible participants. Plan administrators must review the plan documents and understand the various deadlines contained wherein, including when employees become eligible for the plan and when profit sharing and company match contributions must be made.
Update and Manage Plan Documents
To remain compliant with ERISA regulations, a Summary Plan Description (SPD) must be provided to each participant. A common mistake made by benefits administrators is a failure to update the SPD when changes are made to the plan, including material changes such as co-pays and deductibles.
Plans that fall out of compliance may be subject to fines and penalties, so reading and managing the benefit plan documents are a proactive measure the benefits administrator can make to avoid costly mistakes.