Note:  The following checklist is a general guide for ERISA compliance for retirement plans.  It is not intended to be comprehensive but does outline the areas of major compliance.Compliance with the Employee Retirement Income Security Act of 1974 (ERISA) begins with knowing the rules.  

Plan administrators and other plan officials can use this checklist as a quick diagnostic tool for assessing a plan’s compliance with certain important ERISA rules; it is not a complete description of all ERISA’s rules and it is not a substitute or a comprehensive compliance review.  Use of this checklist is voluntary, and it should not be filed with your Form 5500. 

If you answer "No" to any of the questions below, you should review your plan’s operations because you may not be in full compliance with ERISA’s requirements.

1.  Have you provided plan participants with a summary plan description, summaries of any material modifications of the plan, and annual summary financial reports?

2.  Do you maintain copies of plan documents at the principal office of the plan administrator for examination by participants and beneficiaries?

3.  Do you respond to written participant inquiries for copies of plan documents and information within 30 days?

4.  Does your plan include written procedures for making benefit claims and appealing denied claims, and are you complying with those procedures?

5.  Is your plan covered by a fidelity bond against losses due to fraud or dishonesty?

6.  Are the plan’s investments diversified so as to minimize the risk of large losses?

7.  If the plan permits participants to select the investments in their plan accounts, has the plan provided them with enough information to make informed decisions?

8.  Has a plan official determined that the investments are prudent and solely in the interest of the plan’s participants and beneficiaries, and evaluated the risks associated with plan investments before making the investments?

9.  Did the employer or other plan sponsor send participant contributions to the plan on a timely basis?

10.  Did the plan pay participant benefits on time and in the correct amounts?

If you answer "Yes" to any of the questions below, you should review your plan’s operations because you may not be in full compliance with ERISA’s requirements.

1.  Has the plan engaged in any financial transactions with persons related to the plan or any plan official, for example, has the plan made a loan to or participated in an investment with the employer?

2.  Has the plan official used the assets of the plan for his/her own interest?

3.  Have plan assets been used to pay expenses that were not authorized in the plan document, were not necessary to the proper administration of the plan, or were more than reasonable in amount? 

If you need help answering these questions or want additional guidance about ERISA requirements, please contact us.

Seeking to provide training for agents who will be auditing plans for compliance with the Pension Protection Act of 2006 (PPA), the IRS initiated a project to identify potential areas of non-compliance.Although the project remains ongoing, the IRS released a list of issues it has identified so far:

• Annual funding notices—late or undated.
• Elections to use or reduce prefunding and carryover balances—late or undated.
• Elections to use prefunding and carryover balance to meet quarterly contributions—late or with unspecified dollar amount(s).
• Adjusted funding target attainment percentage certification—late.
• Actuarial increase for late retirement benefits—not made.
• Asset valuation—done differently for minimum funding versus funding-based limits.
• Relative value disclosure notices—not compliant with requirements to show relative value compared to the QJSA.
• Contributions—late payment resulting in liquidity shortfalls.
• Quarterly contributions—late.
• Premiums for life insurance policies—inappropriate inclusion as plan expenses in target normal cost.
• Funding—in excess of the deduction limit.
• Determining accrued benefits in the valuation—use of a definition of compensation not consistent with plan terms.
• Compensation for benefit purposes—not defined under the plan.
• Service calculation for benefit purposes—incorrect calculation.
• Distribution options subject to the Code section 417(e) cash-out restrictions—incorrect interest rates used for calculating.

Compliance with the Code section 436 funding-based limits is a qualification requirement, the release point outs. The PPA added new Code section 401(a)(29) to require single-employer defined benefit plans to comply with the new Code section 436 limits on benefits and benefit accruals if the plan is underfunded. Qualification concerns would also be raised where the plan is not operated in accordance with its terms (e.g., determining accrued benefits using a definition of compensation or measure of service that is inconsistent with the plan terms).Nonetheless, the release notes that many of the identified PPA compliance issues are failures to comply with the funding rules and would, therefore, involve the potential assessment of excise taxes and penalties rather than raise qualification concerns.   Health care reform timeline: Key elements of health reform for employers 2010

• Change in tax treatment for over-age dependent coverage
• Accounting impact of change in Medicare retiree drug subsidy tax treatment
• Early retiree medical reinsurance
• Medicare prescription drug "donut hole" beneficiary rebate
• Break time/private room for nursing moms

• Dependent coverage to 26 (grandfathered plans may limit to children without access to other employer coverage, other than parent's coverage)1
• No lifetime dollar limits1
• Restricted annual dollar limits, phased amounts until 20141
• No pre-existing condition limitations for enrollees up to age 191 and no recissions1
• No health FSA/HRA/HSA reimbursement for non-prescribed drugs
• Increased penalties for non-qualified HSA distributions
• Additional standards for new or "non-grandfathered" health plans, including preventive care in network with no cost-sharing appeal and external review, provider choice and non-discrimination provisions for insured plans3
• Income-based Medicare Part D premiums
• Pharmaceutical importers and manufacturers' fees start
• Medicare, Medicare Advantage benefit and payment reforms to begin
• Insurers subject to medical loss ratio rules

1 Applies to all plans, including "grandfathered" plans, effective for plan years beginning on or after Sept. 23, 2010 (Jan. 1, 2011, for calendar year plans).3 Delayed until regulations issued/date TBD

• Employers to distribute uniform summary of benefits and coverage (SBC) to participants (deadlines vary with group of recipients)
• 60-day advance notice of mid-year material modifications to SBC content
• Form W-2 reporting for health coverage (track in 2012 for W-2 form provided in early 2013)4
• Coverage for additional women's preventive care services begins (plan years on or after August 1, 2012)5

4 A temporary exemption applies to certain categories of employers5 Applies to nongrandfathered plans

• $2,500 per plan year health FSA contribution cap (plan years on or after January 1, 2013)
• Comparative effectiveness group health plan fees begin
• Annual dollar limits on essential health benefits cannot be lower than $2 million
• Employers notify employees about exchanges
• Medical device manufacturers' fees start
• Higher Medicare payroll tax on wages exceeding $200,000/individual; $250,000/couples
• Change in Medicare retiree drug subsidy tax treatment takes effect
• Exchanges initial open enrollment period to begin

• Health insurance exchanges
• Individual coverage mandate
• Financial assistance for exchange coverage of lower-income individuals
• States may expand Medicaid
• Increase in wellness limit
• Employer shared responsibility
• Additional reporting and disclosure
• Dependent coverage to age 26 for any covered employee’s child2
• No annual dollar limits2
• No pre-existing condition limits2
• No waiting period over 90 days2
• Additional standards for non-grandfathered health plans, including limits on out-of-pocket maximums ($6,250/individual, $12,500 /family in 2013),  provider nondiscrimination, and coverage of routine medical costs of clinical trial participants
• Small market, non-grandfathered insured plans must cover essential health benefits with limited deductibles (initially $2,000/individual, $4,000/family), using a form of community rating
• Insured non-grandfathered plans of all sizes must offer guaranteed issue and renewability
• Health insurance industry fees begin
• Temporary reinsurance fees
• Auto enrollment sometime after 20143

2 Applies to all plans, including grandfathered plans, effective for plan years beginning on or after Jan. 1, 2014.3 Delayed until regulations issued /date TBD.

• Temporary reinsurance fees begin

• 40% excise tax on "high cost" or Cadillac coverage

• Definition of the Term "Fiduciary" & Related Exemptions – Proposed Delay of Applicability Dates   
  • Federal Register Notice
  • News Release
  • Public Comments
  • Temporary Enforcement Policy
• Presidential Memorandum on the Fiduciary Duty Rule
• Final Rule
• Best Interest Contract Exemption (Corrected) 
  • Best Interest Contract Exemption
• Class Exemption for Principal Transactions (Corrected) 
  • Class Exemption for Principal Transactions
• Amendment to PTE 75-1, Part V
• Amendments to and Partial Revocation of PTEs 86-128 and 75-1
• Amendments to Class Exemptions 75-1, 77-4, 80-83 and 83-1
• Amendment to and Partial Revocation of PTE 84-24
• Proposed Best Interest Contract Exemption for Insurance Intermediaries

The Department of Labor (DOL) has proposed a delay in the applicability date of its Fiduciary Rule to June 9, 2017, in order to complete a review of the Rule.     

MEMORANDUM FOR THE SECRETARY OF LABORSUBJECT: Fiduciary Duty RuleOne of the priorities of my Administration is to empower Americans to make their own financial decisions, to facilitate their ability to save for retirement and build the individual wealth necessary to afford typical lifetime expenses, such as buying a home and paying for college, and to withstand unexpected financial emergencies.Term "Fiduciary"; Conflict of Interest Rule Retirement Investment Advice, 81 Fed. Reg. 20946 (April 8, 2016) (Fiduciary Duty Rule or Rule), may significantly alter the manner in which Americans can receive financial advice, and may not be consistent with the policies of my Administration.Accordingly, by the authority vested in me as President by the Constitution and the laws of the United States of America, I hereby direct the following:Section 1. Department of Labor Review of Fiduciary Duty Rule. (a) You are directed to examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice. As part of this examination, you shall prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule, which shall consider, among other things, the following:(i) Whether the anticipated applicability of the Fiduciary Duty Rule has harmed or is likely to harm investors due to a reduction of Americans' access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice;(ii) Whether the anticipated applicability of the Fiduciary Duty Rule has resulted in dislocations or disruptions within the retirement services industry that may adversely affect investors or retirees; and(iii) Whether the Fiduciary Duty Rule is likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.(b) If you make an affirmative determination as to any of the considerations identified in subsection (a) or if you conclude for any other reason after appropriate review that the Fiduciary Duty Rule is inconsistent with the priority identified earlier in this memorandum then you shall publish for notice and comment a proposed rule rescinding or revising the Rule, as appropriate and as consistent with law.Sec. 2. General Provisions. (a) Nothing in this memorandum shall be construed to impair or otherwise affect:(i) the authority granted by law to an executive department or agency, or the head thereof; or(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.(d) You are hereby authorized and directed to publish this memorandum in the Federal Register.DONALD J. TRUMPSource: The Department of Labor:  https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/completed-rulemaking/1210-AB32-2Source, Whitehouse.gov : https://www.whitehouse.gov/the-press-office/2017/02/03/presidential-memorandum-fiduciary-duty-rule.

Fiduciary Compliance

The fiduciary standards and prohibited transaction rules of Title I of ERISA have become extraordinarily complicated, for both plan sponsors and all service providers. The  ERISA Group’s fiduciary compliance practice group works with clients to maintain compliance with ERISA fiduciary standards as well as the prohibited transaction rules. 

We work with plan sponsors and other plan fiduciaries to address matters of corporate governance, plan administration, reporting and disclosure, plan investments, and specialized issues involving employer securities or employer real property.  

Specific matters may include: 

Plan committees and formal plan charters and policies

DOL or IRS audits Prohibited transaction, voluntary fiduciary corrections and other DOL fiduciary resolution matters

Prohibited transaction exemptions

Investment offerings or transactions involving employer securities and employer real property

ERISA fiduciary insurance matters

Investment advice, investment management and investment education issues Investment transactions of all types, including derivatives and commodities, futures, swaps, affiliated products or services, alternative products and securities lending

Fiduciary training and internal ERISA Fiduciary Manual ERISA Section 404(c) compliance 

INHAM and QPAM compliance

Negotiating settlement agreements with the DOL in cases involving misuse of plan assets and other fiduciary violations

Financial Institutions

Our fiduciary compliance practice offers a complex suite of investment products and services to both ERISA and non-ERISA retirement plans, as well as governmental plans and IRAs, at both the retail and institutional level. 

Specific areas that may often trigger ERISA fiduciary concerns include:  

- Preparing investment advisory agreements, investment management agreements, product distribution agreements, and account opening documentation

- Counseling on self-directed accounts and brokerage windows Affiliated investment products or services-

- Preparing principal trades, cross trades, QPAM or INHAM status Plan asset issues, REOC or VCOC status 

- Providing ERISA and Tax pension guidance on fiduciary duties and prohibited transaction rules regarding infrastructure and renewable energy investments

-  Structuring QDIA qualification, share class selection, soft dollars, incentive compensation, and collective  investment trusts 

- Coordinating wrap programs, revenue sharing arrangements 

- Providing alternative investment products 

- Establishing offerings and advising on collective investment funds 

 - Offering fiduciary training 

-  Providing ERISA compliance manuals 

-  ERISA cybersecurity issues

Retirement Plans

We counsel public and private employers on a wide variety of retirement plan matters including the following areas:

Design and compliance for all types of qualified and nonqualified retirement plans for both for-profit and tax-exempt employers, including: 

Defined contribution 401(k) and profit-sharing plans

403(b) plans 457 plans 

Employee stock ownership plans (ESOPs) and 401(k) ESOPs (KSOPs)

Money purchase pension plans 

Defined benefit and individual account pension plans 

Cash balance plans 

IRAs 

Documents and amendments for individually designed and pre-approved retirement plans, including:  

   Review of other providers’ documents under Private Determination Letter Program (“PDLP”) 

    Draft and maintain individually designed documents 

   Sponsorship of three IRS pre-approved documents for adoption by our clients:

        Defined contribution plan – nonstandardized, with 401(k), profit sharing, matching and money purchase   contribution options (approved on June 30, 2020) 

        Defined benefit pension plan, with traditional and cash balance options (approved on March 31, 2018)   

       403(b) plan (approved on April 13, 2017) 

Retirement plan regulatory compliance issues, including: 

Nondiscrimination, coverage and top-heavy testing; annual addition and benefit limitations; controlled group and affiliated service group analyses 

Bankruptcy issues 

401(a), 403(b) and 457(b) plan compliance issues for public sector employers (governmental plans). 

Tax consequences to employers and employees of retirement plans, including income and excise taxes for excess contributions; unrelated business taxable income; prohibited transactions; and failure to meet minimum funding standards 

Voluntary IRS and DOL compliance and correction programs applicable to qualified plan operational and document failures; reporting and disclosure failures; and breaches of fiduciary duty 

Employee benefit plan administration, including: 

   supporting clients’ benefits personnel in matters involving participant communications 

   ODRO's (qualified domestic relations orders)

   plan investment policies and plan loan policies

  contract negotiations with service providers

contributions, distributions, rollovers, terminations (including partial terminations) plan self-audits. 

- Terminations of pension and other retirement plans, including Pension Benefit Guaranty Corporation (PBGC) and IRS filings 

- ERISA reporting and disclosure, including preparation or review of annual reports, summary plan descriptions and other employee communications 

- Applications for IRS determination letters and other rulings, and DOL exemptions and advisory opinions  -

- IRS, DOL and PBGC audits and examinations 

- Employee benefit plan issues in mergers and other corporate transactions 

- Multiemployer (union) plan compliance, including employer withdrawal liability issues. 

The firm’s retirement plan clients include:  

- Taxable employers, both publicly traded and closely held Tax-exempt employers (particularly hospitals and their affiliates) 

- Professional and trade associations Retirement plan trustees

-  Retirement plan consulting firms and third party administrators 

- Governmental entities 

- Investment advisers

-  Plan participants and beneficiaries.

This is for informational purposes only, and is not intended to be used as legal advice.  

©COPYRIGHT 2021  ALL RIGHTS RESERVED

Bianca Zahrai, Esq. 

The ERISA  Group 

Telephone: +1 (415)  818-4473 

Facsimile: +1 (415) 946-8801