Check Fidelity Bonds

Plan sponsors should ensure that their qualified plans have adequate coverage against theft of assets. Plan sponsors must have an ERISA Fidelity Bond that generally provides coverage of at least 10 percent of the plan assets up to a maximum requirement of $500,000 (or $1,000,000 if the plan holds employer stock). The bond protects plan assets against theft or other misappropriation by the person or persons “handling” those assets. Plan sponsors should review the bond terms to make sure the bond is properly titled and provides the proper coverage.

Allocate All Forfeitures

Plan sponsors of defined contribution plans should ensure that any amounts in their plans’ forfeiture accounts or ERISA budget accounts are allocated by the end of the plan year according to the terms of their plan documents (e.g., by allocating them to active plan participants or applying them toward future plan expenses).

Adopt Required Plan Amendments

If you sponsor a single employer pension plan and have not yet adopted a plan amendment to reflect the funding-based benefit restrictions for plans less than 80 percent funded, an amendment must be adopted by the latest of: (i) the last day of the first plan year that begins on or after Jan. 1, 2013; (ii) the last day of the plan year for which Section 436 is first effective for the plan; or (iii) the due date, including extensions, of the employer’s tax return for the tax year that contains the first day of the plan year for which Section 436 is first effective for the plan (Dec. 31, 2013 for most calendar year plans).

Adopt Discretionary Plan Amendments

Plan sponsors should ensure that they timely adopt any discretionary amendments they have made to their plan documents by the end of the plan year (December 31 for calendar year plans).

Update Beneficiary Designation Forms

Plan sponsors should remind employees to review and update their beneficiary designation forms on file. This update is especially important for employees with same-sex spouses, as these employees’ spouses are now eligible for spousal benefits under retirement plans.

Distribute Participant Notices

Depending upon the type of qualified retirement plan offered, plan sponsors may need to issue certain notices before the start of the 2014 plan year (e.g., summary annual reports and 404(c) notices). For example, plan sponsors of safe harbor 401(k) plans must distribute a “safe harbor” notice explaining the safe harbor matching or non-elective contribution arrangement used under the plan. If a plan has a qualified default investment alternative, or “QDIA,” plan sponsors must distribute a notice explaining how a participant’s contributions will be invested in the absence of specific directions from the participant. Additional notice requirements may apply, so please contact your SRZ attorney for more information.