Recordkeeping Responsibility

[Guest jam]

Who has recordkeeping responsibility for loans and payments-the employer and the plan administrators, or just the plan administrators? If there is a problem with the recordkeeping, should the company accountants find it and correct it, and ultimately call for an audit of the whole plan? We have this in our firm. The payroll deductions are difficult to track since they are as late as possible (42days?) and the administrators have sloppy accounting practices and employee accounts/loans are inaccurate. Now we are going to a new administrator and I think the whole plan should be audited before we get in deeper. I appreciate your answers and advice.

jam

[stephen]

There seems to be several issues here:

1) Salary deferral deposits are to be made no later than the 15th business day of the month following when they are deducted or sooner if administratively feasible. Our clients who have weekly payroll we have advised to make weekly deposits.

2) My presumption is this is a small plan (under 100 participants) or an annual audit would be required by the 5500. It may be a good idea to have the plan aduited before transferring to the new TPA.

3) Hopefully, the new TPA knows the state of the plan and is prepared to invest the time and resources to correct the problems.

[Guest jam]

A company called DailyAccess.com has been selected to take care of the 401-k and it is all internet based. Monies beginning this week will be adminstered by them. As soon as the old money is verfied, then they will administer that. I do not believe that either the old plan adminstrator nor our company business office is having an audit performed to account for all of the assets. It is being done by an accounting clerk.

Is it inappropriate to ask for an audit by the IRS or DOL when we know that funds have been lost or misappropriated? It is our only retirement money and it is our money that is not being accounted for! This has really got us hot under the collar! We only want the right thing done to protect our assets.

jam

[stephen]

Generally, if a participant feels there is something amiss in a plan and they contact the DOL directly the DOL will investigate. There are fines involved for the late employee deposits.

You say Daily Access will verify the old monies prior to taking them over so it appears there will be some auditing by the new recordkeeper.

You may want to wait and see what happens with Daily Access and their takeover process before calling the DOL.