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401(k) Compliance Guidance is Now Available Online

    Client Alerts
  • March 09, 2007

The IRS announced this week in its publication Retirement News for Employers that guidance on the top ten compliance issues for 401(k) plans is now available online.  This information is also found in Publication 4531, but the online version is easy and convenient to use and includes links to in-depth discussion of the identified compliance issues and additional resources. 


The top ten 401(k) compliance issues identified by the IRS are:


  • Has your plan document been updated within the last few years to reflect recent law changes?
  • Have you notified the people who service your plan of any plan changes?
  • Is your plan’s operation based on the definitions and requirements (terms) written in your plan document?
  • Were all eligible employees identified and given the opportunity to make an elective deferral election?
  • Is the plan’s definition of compensation used for all deferrals and allocations?
  • Have you timely deposited employee deferrals each pay period?
  • Have you identified all your highly compensated employees and key employees, including owners and their family members, so that your TPA can perform you nondiscrimination tests?
  • Have the 401(k) nondiscrimination tests (ADP, ACP, and Top-Heavy) been performed counting all eligible employees?
  • Have you filed a Form 5500 series return, and have you distributed a Summary Annual Report (SAR) to all plan participants this year?
  • Are elective deferrals limited to the amounts under IRC 402(g) for the calendar year?

Although this list is not intended to be comprehensive – for example, it generally does not include fiduciary and other ERISA issues – it should assist employers with conducting simple compliance audits and designing appropriate compliance procedures.  If a simple audit indicates that a compliance problem may exist, an employer should undertake a more complete audit with professional assistance.


The online checklist may be found at