Being a plan sponsor comes with a great responsibility. If you’re a first-time plan sponsor entrusted to oversee your employees’ financial futures, it's completely normal to feel overwhelmed and unsure about where to start. At RPCSI, we understand these concerns. That's why we’ve crafted this helpful roadmap to help you navigate your new role as a plan sponsor. Using our expert knowledge, you can start your plan sponsor journey with confidence and fulfill your responsibilities like a seasoned professional.
5 Tips for Success as a New Plan Sponsor
Tip 1: Know Your Responsibilities
Let’s start with the basics. Understanding and fulfilling your responsibilities as a plan sponsor is crucial. But what are they? As plan sponsor, you are the primary decision-maker and administrator of your organization's retirement plan. This includes establishing and maintaining the plan, ensuring compliance with laws and regulations, and ultimately being accountable for the plan's success.
Tip 2: Get Familiar with the Plan Document
The plan document is the foundation of your organization’s retirement plan and explains how the plan is governed. Within it, you’ll find the following:
Eligibility requirements: rules for who can participate in the retirement plan
Contribution limits: the maximum amount the IRS says can be contributed
Vesting schedules: the timeline for when employees are entitled to contributions
Plan distributions: the guide for how and when an employee receives distributions
Plan loans: information on if and how participants can take loans from the plan
Take the initiative to thoroughly understand the plan document and how it applies to your organization. This will help you make informed decisions and effectively communicate with participants.
Tip 3: Implement Efficient Governance
Implementing effective governance practices is essential for successful plan sponsorship. Establish a committee to oversee the plan, define roles and responsibilities, and develop policies and procedures. Doing so will establish transparency, fairness, and fiduciary compliance. Regularly review and update these practices to maintain a well-managed retirement plan.
Tip 4: Stay Updated with Regulatory Changes
Laws and regulations surrounding retirement plans are subject to change. That’s why it’s vital for plan sponsors to stay informed about any updates that may impact their plan. Continuously educate yourself on regulatory changes such as the ones brought forth by SECURE Act 2.0 to understand and navigate these complexities within your plan.
Tip 5: Be Diligent in Correcting Plan Errors
Within the same vein of maintaining compliance is quickly identifying and correcting plan errors. Mistakes in plan administration can occur, so recognizing and correcting errors is vital for maintaining plan integrity and avoiding penalties. Conduct plan reviews and audits to identify and correct errors effectively.
The Ultimate Plan Sponsor Tip: Partner with the Experts at RPCSI
Partnering with RPCSI provides you with access to our 20 years of experience in retirement plan administration and design. We specialize in assisting new plan sponsors and provide comprehensive services, including plan setup, administration, and employee education. Additionally, know your plan is compliant at all times thanks to our CEFEX certification, a valued marker for those who demonstrate unwavering commitment to upholding industry standards and best practices. Trust RPCSI to be your expert partner in successfully navigating your role as a plan sponsor.
Together, let's secure the success of your retirement plan. Reach out today to request a quote and start your plan sponsorship on the right path.
