“We are a large, complex health care system that sponsors a 403(b) plan for all the 501(c)(3) members of our controlled group, of which there are many. We have some issues with recording the proper dates of termination of employment for retirement plan purposes. One problem is that the process of reporting termination dates is a manual one, and some of our managers are simply more efficient at it than others. In addition, since it is not a payroll item, termination dates are not fed to our recordkeeper each payroll as part of our remittance feeds, but instead as a separate, less-frequent feed from our HRIS system. Finally, we have a lot of rehires, as well as employees who transfer between employer in our controlled group. This has resulted in our recordkeeper failing to capture some termination dates.
We know we need to fix this, but how important are proper termination dates for retirement plan compliance purposes? As I’m sure the Experts can understand, there are a lot of competing benefits projects here, so I want to prioritize this project accordingly.”
Kimberly Boberg, Taylor Costanzo, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:
You are certainly asking the correct question here, as there are varying levels of importance of retirement plan elements. For example, if you were having great difficulty tracking down lifetime employee contributions for 15-year catch-up purposes, the Experts...
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