Making sure you comply
with the federal Employee Retirement Income Security Act (ERISA) is a lot
easier when you have a basic understanding of ERISA’s rules.
following checklist as guidance to determine if their current plan complies
with ERISA’s requirements, including some of the thorniest ones:
1. Have you given all of
your plan participants a summary plan description, summaries of any material plan
changes, and yearly summary financial reports?
2. Do you keep copies of
all plan documents at a main office so that participants and beneficiaries can
examine them if they want to?
3. Do you respond to
participant requests for copies of plan documents and information within 30
days?
4. Is your plan covered
by a fidelity bond to insure against losses from fraud?
5. Does your plan
include—and are you complying with—written procedures for making benefit claims
and appealing any denied claims?
6. Are your plan’s
investments diversified to minimize the risks of large losses?
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7. Has a plan official
determined that the investments are financially prudent and solely in the
interests of the plan’s participants and beneficiaries? Has a plan official
also evaluated the risks before making the investments?
8. If your plan permits
participants to select the investments they want in their plan accounts, have you
provided them with enough information to make an informed decision?
9. Do you send
participant contributions to the plan on a timely basis?
10. Does the plan pay
participants their benefits on time and in the correct amounts?
If you answered “yes” to
all of these questions, your ERISA plan most likely complies with the legal rules.
If you answered “no” to any of these questions, however, you may be running
afoul of ERISA’s requirements.
It’s always a good
practice to review your ERISA plan regularly to ensure that you’re following
the law. Any questions you have about your ERISA plan can usually be answered
by the U.S. Department of Labor Employee Benefits Security Administration
(EBSA) office in your area. You can find contact information for the regional
EBSA offices in
at www.dol.gov/ebsa.