Administrative Responsibilities of a SIMPLE IRA versus Qualified Retirement Plan

• Operate plan for the benefit of the participants
• Follow the plan documents
• Ensure fees are reasonable
• Oversee service providers and advisor
• Enroll new employees (participants) and rehired employees at the correct time
• Deduct and upload payroll deductions/matches correctly and on time
• Maintain 401k related documents and records
• Approve and sign employee transactions (distributions, loans, hardships, etc.)
• Review and distribute required notices to employees
• Purchase and maintain correct Fidelity Bond coverage
• Provide year-end employee census and annual compliance questionnaire to service providers
• Sign (and possibly file) Annual Form 5500

These are general 401k responsibilities for businesses.  These responsibilities may vary depending on the business size and the plan terms. This is not an exhaustive list.  See your service provider agreement for a more plan specific and detailed list.

There are additional options to delegate some of these responsibilities to service providers (for a fee).

• Complete and store form 5304
• Set up IRA accounts for individual employees
• Distribute form 5304 annually for employees to sign
• Setup IRA for new employees
• Distribute form 5304 to new employees
• Store/file all signed 5304 forms
• Deduct and send employee contributions to employees’ IRAs accurately and on time*
• Send employer contributions to employees’ IRAs accurately and on time**

*If the employee contribution is selected.  Employee contributions must be sent to IRAs no later than 30 days after the month in which they were withheld.

**Must be sent to IRAs before the business tax return is filed.

This information is not intended as authoritative guidance or tax or legal advice. You should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.