Special Project Staffingtr0cko2
Receiving a letter from the Internal Revenue Service (IRS) is never an enjoyable experience. Unless of course the letter is accompanied by a check made out to you! More often than not, however, the IRS letters received by plan sponsors are compliance failure or other regulatory alerts that need to be corrected. Some examples would be: missed filing deadlines, risk of a retirement plan becoming unqualified, and many others. If you, as the plan sponsor, have ever received letters like these from the IRS or Department of Labor (DOL) and did not know where to turn, The Ryding Company is here to help by providing guidance to resolve the issues in an easy-to-understand manner. First, it’s important to understand what is meant by a “qualified” plan status and what can cause a plan to become “unqualified.” The IRS defines a “qualified plan” as a plan that satisfies “the Internal Revenue Code in both form and operation”. A qualified plan grants a tax-exempt status to the employer on top of the employee benefit of retirement saving. This definition is further broken down into 21 sections including minimum participation requirements, elective deferral test, nondiscrimination requirements, and many more like these that are accompanied by rules and regulations. When these rules and regulations are not followed, the plan is at risk of becoming “unqualified”, losing the tax-exempt status, and becoming a “nonexempt trust”. All is not lost when a plan becomes unqualified, but the path back to qualified status can be arduous without some guidance from experts who have navigated those situations before. Again, enter The Ryding Company. Our firm often partners with plan sponsors who for one reason or another find their retirement plan in the crosshairs of an IRS auditor. These plans typically did not have a Third Party Administrator (TPA) involved with the filing of their plan’s Form 5500 in the past and have found themselves needing to complete corrective work for past administration year(s). Depending on the situation, these corrections can cover as little as one plan year, but as many as a few decades. Each situation is unfortunate and likely could have been avoided, but they do still happen on occasion. In situations like these, The Ryding Company is hired in one of two capacities: to correct the administration years in questions or, two, to assist the plan sponsor terminate their plan. Since these plans have historically not been scrutinized under the watchful eye of a TPA, these projects rarely require the same solutions and as such entail various levels of interaction, care, and specialization to bring the plan back into qualified status. In short words, each special project staffing engagement is unique and specific to the situation. The first step for plan sponsors is to determine if your plan actually needs corrective work done. This can be confirmed by a notice from the IRS indicating your retirement plan is out-of-compliance, if your plan has surpassed 120 participants but was not filed with an auditors opinion, if your business has recently completed a merger/acquisition but continues to manage the plan the same as before, and many more situations like these. Retirement plan administration is a complex industry with ever changing rules and regulations. With compliance regulations constantly changing, it behooves plan sponsors to maintain a current, personal knowledge of the updates or retain a TPA to do so on the plan sponsor’s behalf. Regardless of your plan’s current status, you can call our Sales and Marketing Team to determine if Special Project Staffing is appropriate for your plan. We will conduct a risk-free analysis of your plan and make recommendations to you with the best course of action to meet your needs. As always, the better the quality of information provided to our firm, the more accurate and specific our assessment will be to address your retirement plan’s state.