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Most Retirement Plans Aren't Periodically Checking Compliance

Few companies regularly verify their retirement plan's compliance.

In a variety of corporate surveys, company executives have cited concerns about growing risks and regulatory burdens as major causes for worry and stress. However, a study from Towers Watson shows that less than three-quarters of executives that oversee contribution and defined benefit plans are

In a variety of corporate surveys, company executives have cited concerns about growing risks and regulatory burdens as major causes for worry and stress. However, a study from Towers Watson shows that less than three-quarters of executives that oversee contribution and defined benefit plans are regularly checking to ensure they are compliant with regulations.

The study revealed many executives will only address some retirement plan issues after the fact, rather than be proactive and conduct reviews of the plans' compliance.

Almost half of respondents said receiving notice from the IRS or Department of Labor about a pending audit will prompt them to review their program, and 62 percent will do so if an adviser finds "events that suggest new risks."

"Prudent, diligent plan governance requires identifying key risks and challenges, and employing methods to assess the effectiveness of decision making, oversight and plan operation," the report says.

Robyn Credico, a senior consultant with Towers Watson, said in an interview with Business Insurance that it seems plan sponsors will devote more attention to reviewing investments than they will making sure the plans comply with government regulations.

Comments

Topic Expert
Barrett Peterson
Title: Senior Manager, Actg Stnds & Analysis
Company: TTX
(Senior Manager, Actg Stnds & Analysis, TTX) |

If something under 75 percent are checking, as stated, "most" appear to be reviewing, as my company does routinely.

Topic Expert
Barrett Peterson
Title: Senior Manager, Actg Stnds & Analysis
Company: TTX
(Senior Manager, Actg Stnds & Analysis, TTX) |

If something under 75 percent are checking, as stated, "most" appear to be reviewing, as my company does routinely.