Blue Ridge ESOP Associates Industry News

Plan records can take many forms. While no bright line legal definition of what constitutes a plan record exists, the DOL generally delineates between plan level and participant level records (although there is some overlap). Plan level records include various filings (e.g. 5500) and records used to support the filings. Records relating to non-discrimination and coverage testing, required disclosures, financial reports and evidence of the Plan’s fidelity bond are also types of plan level records. These types of records should be retained for at least 6 years.   Participant level records relate to the determination of a participant’s benefit such as account records, census data, distribution and loan documents, Board and/or administrative committee minutes and resolutions, and plan and trust documents. Participant level records should be maintained as long as necessary to determine benefits due or which may become due. IRS guidance provides records should be maintained until all benefits have been paid and the Plan is no longer subject to audit. Participant level records as defined by the DOL and IRS guidance imply some records should be maintained indefinitely.

Forfeitures most often occur when a participant’s employment terminates before the participant’s accounts are 100% vesting.   As terminated participants receive payment of their vested accounts (or have a 5-Year Break-in-Service, if sooner), the nonvested portion of their account transfers to the forfeiture account.  Plan documents include specific rules on when forfeiture of nonvested balances is triggered.   Sizeable amounts may accumulate in forfeiture accounts as this process is repeated over a period of years.   IRS examiners have noted that employers are allowing forfeited money to stockpile in suspense accounts for years, which is not permitted.  In response to this, the IRS issued a proposed rule to clarify how and when forfeitures must be used. 

In previous communications, we've discussed the significant changes brought about by the SECURE 2.0 Act. Effective implementation of many provisions within the act relies on guidance from the IRS and DOL. IRS Notice 2024-02 and IRS Notice 2024-55 offered clarification on several crucial aspects of SECURE 2.0. Guidance is helpful as plan sponsors make decisions regarding both required and optional provisions in the act. Here are some key provisions to consider:

Texas/Oklahoma Chapter - 2024 Fall Conference

Blue Ridge is a proud Leader Level Sponsor at next week's Ohio/Kentucky Chapter's 2024 Thoroughbred Conference where our professionals will be attending and speaking.

Blue Ridge is a proud Pre-Conference Sponsor for the upcoming 2024 Annual Employee Ownership Conference where our experts will be sharing about "Maximizing ESOP Success: Effective Communication, Cultural Engagement, and Technical Foundations". During the conference, swing by our booth for some surprise giveaways and let our professionals provide you information about our enhanced integrated services from communication to administration.

Blue Ridge is a proud Gold Sponsor at this week's Ohio Employee Ownership Conference, and our professionals will be speaking at the sessions listed below.

Blue Ridge is a proud Leader Sponsor for the upcoming Ohio/Kentucky 2024 Spring Conference, and our professionals will be speaking at the sessions listed below.

Our team of professionals will be in attendance at the upcoming conference and available to provide information about all of the services Blue Ridge is able to offer for your company.  Scott Freund will be presenting a mini-session about "Distribution Calendars".