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March 7, 2012

How Does My Organization’s 401(k) Plan Compare to Others?

Filed under: Benefits,Management Practices,Retirement — Tags: , 7:00 am

One of the biggest challenges in HR’s is in the area of benefits.  For many organizations, benefits may be the deciding factor for a prospective employee in responding “yes” or “no” to a job offer.  It is important for organizations to know where they stand in comparison to their peers in terms of competitiveness of benefits.  Recently, the IRS posted an Interim Report of their findings from the 401(k) Compliance Check Questionnaire.  This questionnaire was sent out in 2010 to a representative sample of 401(k) sponsors of all sizes, with a response rate of 98% of the 1,200 surveys completed.

The IRS website states that there are more than 500,000 Section 401(k) plans covering more than 60 million Americans.  The purpose of the survey was to understand compliance issues and check the operation of these plans since they affect so many Americans.

The Interim Report lists the highlights of the findings, including items pertaining to plan type, employee contributions, and employer contributions.  Because of the broad sampling, this report is a valuable resource for 401(k) plan sponsors to compare their plan to survey results.  Additionally, the questionnaire is available for organizations to complete as an internal control tool to review your plan for compliance issues.  In the event you find areas that need corrections, there is a 401(k) Fix-It Guide to help correct them along with a “correcting plan errors” Web page.

The final report, highlighting the differences found between large and small plans, will be released by the end of 2012.  In the meantime, resources are plentiful as indicated by the links above.

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