Defined contribution plans generally follow calendar years, which prevents compliance and administration complications that arise from an off-calendar plan year. Off-calendar plan years are typically structured to follow the fiscal year, with the rationale that the profit sharing contributions would be tied to fiscal year performance. This logic is somewhat flawed, since you are effectively giving the same profit sharing contribution at whatever point you decide to make the contribution, but you are increasing the administrative costs and risk of errors (administration or compliance) in running the off-calendar plan year.
The age-old debate of using a bundled vs unbundled model for a 401k plan has troubled plan sponsors for years. Try a Google search for “Bundled vs. Unbundled 401k“. Every provider and 401k resource seems to list the pros and cons of each model and then either promote their strategy or leave the plan sponsor with all the pros and cons, still wondering which service model is best for their 401k plan.
The Department of Labor (DOL) fiduciary rule, delayed from the original April 10, 2017 deadline, expands the ERISA (Employee Retirement Income Security Act) definition of “investment advice fiduciary” so that every financial professional working with retirement plans would be held accountable as a fiduciary of the plan.
I am a small business owner sponsoring a 401k retirement plan. Are my personal assets at risk? What kind of coverage can I get with Fiduciary Liability Insurance and how does it differ from the required ERISA Fidelity Bond?