Fiduciary Resources

Beware the 'Ides' of the Fiduciary Calendar

By Tom Foster

Before his untimely demise, Julius Caesar was warned by a soothsayer to “beware the ides of March.” The fateful date holds special meaning not only for the Roman emperor but can for retirement plan sponsors and their financial advisors as well.

The “Ides” (March 15, or the first business day preceding or following March 15 in a particular year) can be one of several key dates that relate to retirement plan regulatory filings and other plan action items sprinkled, across the calendar year (and, as applicable, the plan year). Employers that sponsor retirement plans – both the defined contribution (DC) and the defined benefit (DB) varieties – may look to their financial advisors as a resource to help them stay on top of these key dates and required tasks.

But it’s easier said than done. It may sometimes be challenging to keep abreast of all of the necessary filings, especially for those who are relatively new to the retirement plan marketplace.

For instance, if a plan is required to perform Actual Deferral Percentage (ADP) or Actual Contribution Percentage (ACP) testing, and there is a ADP or ACP testing failure, the plan sponsor must take the corrective action described in the plan document during the statutory correction period to cause the tests to pass. The statutory correction period is the 12-month period following the close of the plan year for which the test failed.  If the sponsor takes corrective action after the first 2-1/2 months of the correction period, the sponsor is also liable for an excise tax (in addition to making the correction).  If correction is not made within the correction period, the plan is considered “disqualified,” unless the plan obtains relief through the IRS’s Employee Plans Compliance Resolution System (EPCRS).

Those who miss these dates might well wish they suffered Caesar’s fate instead. But I digress.

Advisors should work closely with their retirement plan providers and the plan’s legal counsel to help determine and track the dates applicable to particular plans and help ensure sponsors fulfill their filing obligations and other action items.

Some providers publish calendars with potential key dates and other insights about the filings, which the plan can review with its experienced advisors and counsel to determine whether any calendar items are applicable to the plan and its specific circumstances. MassMutual makes a calendar available electronically on the web

Caesar failed to heed the soothsayer’s warning about an important date in March and suffered the painful consequences. Help ensure that your clients who sponsor retirement plans don’t suffer consequences of their own by helping to inform them about key dates on the fiduciary calendar.

Doing so will earn their gratiam.

 

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Thomas Foster Jr. is Assistant Vice President, Strategy and Relationships, for Massachusetts Mutual Life Insurance Company (MassMutual).
 

This article is for informational purposes only and should not be construed as legal, investment, and/or tax advice.  Please consult your own legal counsel and other experts regarding the specific application of the information set forth herein to your own plan and/or circumstances.

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