Are you investing in a benefit plan through your employer? If you are, do you regularly check the deduction from your pay check? Do you receive monthly or quarterly statements summarizing your account activity? Do you read those statements? Do you know what to do if you notice something is not correct? If you answered “No” to any of these questions, don’t worry – you are not alone. This blog post is meant to bring to light some issues one must consider when participating in a benefit plan.
A company or organization that has a benefit plan in place is required to have the plan audited once it has reached a level in which there are over 100 eligible participants. Even if only 20 employees are actively participating, an audit is still required if over 100 employees are eligible. When we perform an audit of a benefit plan, we perform tests ranging such as an individual participant’s contribution amounts for the year as well as the employer level activities involving match amounts and remittance of payroll and investment amounts.
Every year we perform a significant number of benefit plan audits and perform these tests with regularity. As with any testing performed at any level of attestation, errors can be found. With benefit plans, many would expect these errors to be made by the employers (which can be true), but in our experiences we have also found errors made by the Third Party Administrator (TPA). As mentioned before, audits are required for only certain benefit plans, but not all.
Companies and the individuals who are involved in operations make mistakes and whether you are involved in a large benefit plan or a small one, it is important for you as a participant to consider the following:
- If you receive statements, whether in electronic or paper form, take 5 minutes to look it through. Consider the amounts you have put in. Does that seem correct? Do you recognize the names of the funds you are investing in?
- Read through and retain the documents you receive. If there is a vesting schedule provided, where do you fall within the years of service?
- Find out if you have access to the plan’s website. These websites provide access to resources about the plan as well as providing you the ability to make changes in your elected deferral or the funds you have allocated your investments to.
- Get the contact information needed to make changes, whether it is someone in your HR department, payroll department or someone who works for the TPA. If you notice something doesn’t seem right, it’s good to have the contact information readily available to report the matter.
These points may seem simple, but they should be noted. Many individuals that enter into a plan do not test the accuracy of their investment. We recommend taking that extra little step to regularly monitor your investment and consider the points above.