Learn How to Wrap Up the Loose Ends of Your Retirement Savings Plan for the New Year
The new year is here. And it is time to make sure your company’s retirement savings plans are ready for a new year of optimal investments for your employes. Read on to learn more about what you need to do to ensure that 2024 is a smooth year of employee investing.
- Conduct an Annual Review
Once a year, you should conduct an annual review of your company’s retirement savings plans. This review allows you to see whether the plan is working well or needs adjustments for the new year. You can determine if your employees are taking advantage of the offerings or if you need to try a different approach to entice employees to participate. You may also determine if you need to update compliance issues and concerns within your plan options for the new year.
- Make Adjustments to Long-Term Part-Time Employee Options
As of the first of the year, employers must change retirement savings options to allow long-term, part-time employees the opportunity to participate in the retirement savings plans within the company. These changes are the result of the SECUIRE ACT 2.0, in which any employees working 500 hours or more within the past three years or 3 consecutive 12-month periods are now entitled to participate in company sponsored 401(k) retirement savings plans. Make sure you audit all part-time employee hours and offer these options to any employees who fit the requirements for participation.
- Ensure Required Minimum Distributions Are Paid
Required Minimum Distributions (RMDs) relate to distrubitions made to employees (current and past) from their retirement savings plans. Anyone who works for or worked for your company and is over age 72 (73 if they reached 72 after December 31, 2022) takes their RMDs throughout the year. If they do not, you must make the appropriate adjustments and ensure these minimums are reached.
- Update All Employee Records
Participation in an employer-sponsored retirement savings plan is completely optional. However, employers must track all employee, whether they participate or opt-out. Make sure all documentation is accurate and in clear order. Make sure all notices and employee responses are completely accurate to avoid employees making false claims that they never had an opportunity to participate or were never notified of their rights to make investments into their retirement savings plans.
- Make Sure You Delivered All Required Notices
This is more of a tip for next year, as the moment has passed for this year. Required annual participant notices must be sent to all employees on or before December 1. The notices will inform employees of their rights to participate in an employer-sponsored retirement savings plan, their options, and the associated fees. By delivering these notices on time, you will avoid costly fees and keep your plan’s tax benefit to the company intact.
Conclusion
As the new year begins, make sure to stay on top of all of the details and intricacies relating to offering an employer-sponsored retirement savings plan. Contact the retirement planning specialists at Retirement Plan Services Group to help you ensure your investment year goes smoothly and all requirements are met. Call Scott Tanker at 609-922-0201 or email scott.tanker@pbsrep.com.