One of the most tricky jobs for CFOs is making sure the company is doing everything it should as the retirement plan’s fiduciary.
And the DOL has made it clear that what firms don’t know about their fiduciary duties can hurt them – in the form of fines and lawsuits. Not to mention the fact that execs — including CFOs — can be held personally responsible for mistakes.
To make sure your company is safe, employment attorney Keith R. McMurdy suggests firms follow these five best practices:
Protecting your plan
1. Get educated. One of the reasons the feds don’t take kindly to the “we didn’t know” excuse is because there’s an abundance of info out there.
The DOL alone has an extensive library of webcasts on plan sponsor’s responsibilities, and in the first three quarters of this year, it held 256 compliance assistance events.
2. Have a clear strategy. Fiduciaries are required to follow plan terms and act diligently in the interest of plan participants. In order to do both of these things, firms must have a solid understanding of their plan’s terms, and regularly review investment options and get outside opinions.
3. Be aware of potential problems. Issues like prohibited transactions, conflicts of interest and administrative errors are the type of things firms should constantly be on the lookout for. The sooner employers can spot a problem, the better the chances they’ll be able to fix it in a timely manner.
4. Correct errors ASAP. Sometimes mistakes do happen – even to the most vigilant employers. When this happens, it’s critical for firms to remedy the situation right away. By fixing issues as soon as they’re discovered, firms can often avoid penalties, additional taxes or the liklihood of an audit.
5. Consider additional help. There are a slew of services aimed at helping firms with retirement plan administration for a reason: It’s a complicated job. Firms shouldn’t shy away from getting help from benefits counsel, investment advisors, auditors, etc., when needed.