The last point is to finalize ongoing administrative procedures for your plan including:

• Day-to-day operational issues

Finalize operational issues: Make sure that your payroll and benefits staff have a record of salary reduction agreements and are storing them for future reference.

• Universal availability communication plan

When your Universal Availability policy is set, make sure you are using the included materials, or alternate materials that you might develop for your employees, to communicate the plan availability to all eligible employees. Use payroll stuffers, building mailbox stuffers, posters, and e-mail blasts for effective notification. Also, you will want to maintain records of the notifications provided, as well as of the distribution list for those notifications, for future reference in the event of a review or audit.

• Completion of a plan self-audit checklist

You will want to know how contribution limits are being monitored for compliance. Example: Many employers will incorporate the basic participant deferral limit ($16,500 for 2009), across providers, into their system, and require providers to supply completed calculations to support any additional contributions. In addition, you will want to have a procedure to ask employees about outside employment that they control, to identify possible plan contributions that may need to be aggregated with contributions to your plan in applying the overall dollar limit under Code Section 415(c).

• Contribution limits and other items. Remember, private tax-exempt employers maintaining non-ERISA plans should discuss decentralized administration with their legal counsel and vendors.

For ERISA, governmental and church plans, review loan and hardship administration with each vendor on an ongoing basis. The Qualified Service Provider Agreement and document delegate specific responsibilities and work flow to providers in the plan using loans and hardships.

This web site, 403bUniversity.com, includes both a self-audit checklist and compliance manual for use with your benefits and payroll staff. This is a sample checklist, and you may identify additional items for review as well as desired changes to the sample checklist. Encourage a periodic meeting to review your organization’s checklist and document those efforts. Also, document and keep communications with providers and participants for future reference.

Frequently Asked Questions

What administrative procedures should we include in our plan?
Key procedures include operational items such as payroll dates, approved vendor lists, etc., and for ERISA-covered, governmental or church plans will include decisions on universal availability, contribution limit monitoring, loans and hardships, and self-audits.

What if we make a mistake?
The IRS has provided favorable guidance recognizing an employer’s ability to self correct certain identified plan defects, or to request IRS review of certain corrections. An important requirement for relying upon such guidance is the employer having important compliance procedures in place. As a general matter, that does not require that the procedures be perfect. After all, if they were perfect, there likely would be no defects. 403bUniversity.com provides many tools that you can use, in consultation with your organization’s counsel as appropriate, to help document those key compliance procedures.

Is a self-audit checklist a positive for us even if our plan is not audited?
Yes. Performing your own review can help you confirm the areas that are already in good shape, and identify areas that may need additional attention.