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Beyend 401 small buisness owners - Jean D.

Jean.D Beyend 401 small buisness owners - Wiley & sons , 2004. - 274 p.
ISBN 0-471-27268
Download (direct link): beyond401korsmallbusinessowners2004.pdf
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Copy of statement to employee setting forth incident
Copy of opinions, reports, charts, and so on related to polygraph test
Plan descriptions and other records necessary to certify information Employee records to determine benefits
Payroll: one year
Employee: three years
Benefits, and so on: full period plan(s) is in effect plus one year
Employment: One year from date record was created or action taken whichever is later
Discrimination: until final disposition of charge EEO-1: keep copy of most recent file for each reporting unit
Three years from date of contract completion
Three years from date of polygraph test
Descriptions: Not less than six years after filing date of documents based on information contained Employee records: As long as relevant
144 Implementing Your Plan
Table 10.3 Continued
Statute Records Retention Period
Fair Labor Basic employment and Basic: three years
Standards Act payroll records Supplementary: two years
Supplementary records Certificates: until termina-
Certificates of age tion of employment
Written training Training: duration of
agreements program
10.3 provide a quick reference guide for many ongoing legal compliance requirements. While each employer’s requirements will differ, the process to comply is similar.
Compliance Calendar
Preparing a compliance calendar for the year helps business owners stay ahead of the compliance requirements. The calendar should include a start date with enough lead time to prepare and review results. Templates are available for certain communications in addition to required forms. The DOL web site is a good source for background information.
Compliance Requirements for Compensation Plans
A common problem for business owners is compliance with the Fair Labor Standards Act (FLSA) with respect to employee eligibility for overtime pay after 40 hours worked. A compliance program should include a periodic review of jobs as performed to ensure job incumbents are properly categorized for this purpose. This requires determining whether jobs meet the
overtime requirement as described in the FLSA. The Wage and Hour Division of the DOL actively enforces the FLSA.
Maintaining compliance is much better than correcting defects. Establishing a compliance process and calendar helps ensure that you maintain compliance with the laws and regulations. The consequences of being out of compliance for a qualified plan include disallowance of employer deductions, taxable income to participants, return of pretax contributions, and disallowance of rollovers. Plan defects should be corrected ahead of an audit to avoid possible plan disqualification and fines.
Here are three effective business practices:
1. Review your plan(s) on a regular basis. A comprehensive assessment of your plan(s) is recommended at least every couple of years. Plans should be amended and updated as appropriate to keep current with changing business conditions and legal requirements. If audited, you will need to produce current and amended plan and trust documents.
2. Maintain good records. Payroll records and records of plan activity are critical. You should be able to show administrative procedures, “testing” analysis, and documentation of distributions.
3. Establish a compliance process and calendar. Maintaining compliance is an ongoing process. Stay ahead of the requirements by establishing a compliance process and calendar.
Because cost, complexity, and compliance are major considerations in choosing and successfully implementing a retirement plan, it makes sense to learn from the experience of experts and avoid common mistakes. The following interviews represent a broad spectrum of experience and expertise. These nutshell summaries can shorten your learning curve and help you navigate around the most common mistakes. For example, you will learn how to avoid choosing the wrong plan, “back load” fees, “discrimination tests,” and record keeping problems.
With these expert perspectives, you will better understand the questions to ask and how to avoid common mistakes. It is not feasible to address all possible mistakes, and this is not a substitute for independent advice on your specific situation. The first mistake to avoid is choosing the wrong plan.
148 Tips to Avoid Common Mistakes in Retirement Plans
Avoid Common Mistakes by Careful Plan Design and Selection of Retirement Plans
Carol C. Brown, Esq.
Carol C. Brown, Esq., concentrates her practice exclusively in employee benefits law, including ERISA (the federal statute that governs employee benefit plans) and executive compensation. Carol’s firm, Parker & Brown, P.C., is located in Boston, Massachusetts, and on the Internet at
Carol works with businesses and nonprofit organizations to achieve their objectives and keep their plans in compliance with ERISA and the tax code. In avoiding problems, Carol’s approach is to minimize the downside and maximize the upside.
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