Qualified Retirement Plan Requirements
A qualified plan must satisfy the
Internal Revenue Code in both form and operation. This means that the
provisions in the plan document must satisfy the requirements of the
Code and that those plan provisions must be followed. The IRS
administers a determination letter program that enables plan sponsors to
get advance assurance as to the form of their retirement plan
document.
Establish Procedures
Employers should establish practices and
procedures to ensure the plan is operated in accordance with the plan
document so participants and beneficiaries receive their proper
retirement benefits. Be aware that the law and regulations in the
retirement plans area frequently changes. Make sure your plan document
and determination letter, if applicable, are up to date.
When Changes Take Place
Please note that problems often arise
from changes in personnel, procedures, payroll systems, or new service
providers such as accountants, attorneys, actuaries or third-party plan
administrators. Employers that have experienced any of these changes
should give special scrutiny to operational requirements affected by the
change.
Assistance for Complicated Plans
There are some retirement plans that are
designed for employers to set up with little effort or expense- such as
the Payroll Deduction IRA, SIMPLE 401(k), or SIMPLE IRA. However, due to
the complex IRS rules that other plans must follow to qualify, it is
important that you or your plan administrator consult with the IRS and a
tax professional or employee benefits attorney before implementing your
retirement plan. For further information, consult your tax professional
or an employee benefits attorney, or contact the IRS’s Telephone
Assistance for Businesses toll-free at 1-800-829-4933.