Year-End Retirement Plan Sponsor Checklist

As the calendar year comes to a close, now is a good time to review your retirement plan’s administration, compliance requirements, and operational processes. The following checklist highlights key areas plan sponsors should consider before year-end to help ensure a smooth transition into the new plan year.

Annual Compliance Considerations

• Identify employees who meet the definition of a Highly Paid Individual (HPI) under SECURE 2.0 and are therefore required to make catch-up contributions on a Roth basis. Coordinate with your payroll provider and affected employees to ensure awareness of and compliance with this requirement.
• Confirm that your plan’s fidelity bond is in place and that the coverage amount has been reviewed for the current year. As plan assets grow, additional coverage may be needed to maintain compliance with ERISA bonding requirements.

Participant Eligibility & Contributions

• Confirm all eligible employees have been provided the opportunity to enroll in the plan.
• Verify employee deferral elections are being accurately implemented through payroll.
• Review payroll procedures to ensure participant contributions and loan repayments are being remitted timely.
• Identify any significant compensation events, bonuses, commissions, or special payments that may impact participant or employer contributions.
• Ensure compliance with the Long Term Part Time Employee eligibility requirements under Secure 2.0

Employer Contributions

• Estimate the year’s employer matching and/or profit sharing contribution, if applicable.
• Review budgeting assumptions for current and future employer contributions.
• Consider whether current contribution formulas continue to align with organizational objectives and workforce goals.
• Compare payroll contribution data to budget to ensure all contributions were remitted and remitted timely
• Establish time frame and funding for any additional employer contributions

Plan Operations & Compliance

• Confirm plan provisions are being administered in accordance with the plan document.
• Compare definition of compensation for each contribution type in the Plan Document to the definition being used by Payroll Vendor
• Evaluate whether any operational issues may require correction under an available IRS or Department of Labor correction program.

Organizational Changes

• Notify your BPAS Plan Consultant of any mergers, acquisitions, ownership changes, affiliated service group changes, controlled group changes, or other business events that occurred during the year.
• Review ownership and key employee information to identify changes that may impact annual compliance testing or plan administration.

Participant Communications

• Encourage participants to review and update mailing addresses, email addresses, and beneficiary designations.
• Ensure required annual notices have been distributed, as applicable.
• Review enrollment materials and participant communications to confirm they remain current and accurate.

Planning for the Upcoming Year

• Consider whether plan design changes may be appropriate for the upcoming plan year.
• Review automatic enrollment, employer contribution, eligibility, and vesting provisions to determine whether modifications should be evaluated.

Items to Discuss with Your BPAS Team

As you prepare for year-end, consider reaching out to your BPAS representative if your organization is experiencing or contemplating:

• Business acquisitions, mergers, divestitures, or ownership changes.
• Significant workforce growth, reductions, or restructuring.
• Changes to employer contributions or plan design.
• Questions regarding SECURE 2.0 implementation requirements.
• Operational concerns or potential compliance issues.
• Strategies to improve participant engagement and retirement readiness.

Proactive planning can help identify opportunities, address potential concerns, and position your retirement plan for a successful year ahead.

 

Please note that this is not intended to be a comprehensive list of all year-end considerations for plan sponsors. Rather, it serves as a starting point and highlights some of the more common areas that may require attention as year-end approaches.