Vrakas CPAs, Here Are Your Articles for Wednesday, February 01, 2017
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What Must You Disclose About Your Retirement Plan?


It is important that managers stay on top of federal laws governing employees and their benefits. When it comes to pension plans, the overarching law is ERISA (the Employee Retirement Income Security Act). The rules can be complicated, but it pays to know at least the basics. Here is information on what you're required to provide, based on the federal regulations.

  • How must the information be provided? ERISA requires that benefits information must be provided in writing. Some information is to be provided to plan participants on a regular basis and automatically. Other information can be requested by the participant and may be free or have a copying fee associated with it. All requests for information must also be made in writing.
  • What is the summary plan description? The "summary plan description," or SPD, is a document that explains how the plan operates. It tells your staff when they can begin participating in the plan, when they become vested and when they will begin to receive payments. It will also explain how to file a claim for benefits. You should encourage all your participants to read the document and understand it thoroughly.
  • How do you inform employees of changes? If there is a change in your plan, you must inform your participating employees. You may provide a revised SPD or a completely separate document. This is called a summary of material modifications. This must be provided to the participants free of charge.
  • What is the annual report? Each year, your plan administrator must also provide a new copy of the plan's annual report. This summary covers the details, and is filed with the Department of Labor each year. The annual report needs to be provided to your participating employees at no cost. It is also possible for participants to ask for a copy of the complete annual report.

Remember that you don't have to offer a retirement plan, but if you do, you have to follow these disclosure rules. Consult with a qualified financial professional to make sure you're giving your employees everything they're entitled to.


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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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