Text Box: Employer’s Responsibility for Timely Enrollment of Eligible Employees   The timely enrollment of eligible employees (those which have met all eligibility requirements) on their entry dates is an important responsibility of the employer as “Plan Sponsor” and Plan Administrator.  If the Plan Sponsor fails to include eligible employees in a Plan, the Plan has incurred an operational qualification failure that will likely need to be corrected by making corrective contributions to the Plan.   As a general guiding principle, correction of a qualification failure should put the Plan and the participants in the position they would have occupied had the failure not occurred.  The employer generally must correct for all participants and for all taxable years, whether or not closed under any statute of limitations.  The correction must be “reasonable and appropriate” for the failure.                    There may be more than one appropriate correction method for the failure to include eligible employees depending on the plan type, the amount of participants involved, and the length of time of the failure.  If you would like to discuss any concerns regarding the failure to include eligible employees and correction methods available to you, please feel free to contact Pension Plan Administration, LLC.   Below are tips that will help plan sponsors with timely enrollment of eligible employees:   1)  Typically, it is not until the end of a Plan Year that your third party plan administrator is made aware of the specific employees that were enrolled into the Plan during the year, and on which dates they were enrolled.  This is information the Plan Sponsor gives to the third party plan administrator in what is referred to as a “census request”.  It is for this reason that it is extremely important for Plan Sponsors to know and understand the Plan’s eligibility requirements, entry dates, and how the Plan treats rehired employees.  If you have questions regarding eligibility requirements, entry dates, and/or rehired employees, contact us for confirmation of the Plan’s terms to ensure you administer it correctly as the Plan Administrator.   2)  It is important to have enrollment procedures in place, such as reminders on your desk and/or computer calendars of upcoming entry dates.  It may be helpful to schedule enrollment meetings with the Plan’s broker in advance of the entry date.  Handing out enrollment materials prior to the entry date will give employees time to review all enrollment material (enrollment form, fund selection, summary plan description, and summary of material modifications, if applicable) and give the Plan Sponsor time to set up the employee’s salary deferral election (if applicable) to start with the appropriate payroll period.   It is also important to list all employees on the census requests (referenced above) sent to you from your third party administration firm.

Text Box:   The Benefit Bulletin is a publication of: Pension Plan Administration, LLC 200 Louisiana, Little Rock, Arkansas 72201 Phone:  501-320-2430    Fax:  501-320-2440 Website:  www.pensionplanadmin.com Text Box: THE BENEFIT BULLETIN FAST FACTS ABOUT RETIREMENT PLANS Text Box: THE BENEFIT BULLETIN FAST FACTS ABOUT RETIREMENT PLANS Text Box: To remove your name from our newsletter mailing list,  reply to this e-mail with  “unsubscribe” in the subject line.   If at any time you wish to begin receiving our monthly newsletter again, please visit our website at http://www.pensionplanadmin.com to sign up.

Text Box: The following article contains general plan facts and is intended for informational purposes only.  To ensure that your plan contains specific provisions outlined in this and future articles, please contact your third party administrator or plan ERISA attorney.