Most 401(k) mistakes arise from companies allowing their plan to run on autopilot.

Here are three of the most common administrative mistakes according to GFBB Benefits – and proven fixes.

1. Outdated plan documents

State and federal laws change frequently, and employers must update their plan documents accordingly in timely fashion. Apart from the standard advice to review the plan document on a yearly basis, GFFB recommends using a calendar tickler on your computer to remind you (and other compliance officers) of deadlines for plan document amendments. 

Otherwise it’s easy for your company to miss the deadline in the hustle and bustle of daily work. 

2. Administrative practices differ from what’s written in the plan document

Under ERISA, even if certain administrative practices are legal in and of themselves legal, your plan is still non-compliant if the practices are different than those spelled out in the plan document. For instance, the plan adminstrator’s method of calculating matching contributions may differ slightly from the one specified in the plan document. 

Likewise, trouble can arise when your plan documents and employee handbooks contradict one another. The best solution is a yearly review, preferably by an outside source.

3.  Form 5500 mistakes

 It’s up to the plan administrator to make sure the 401(k) report on Form 5500 is completed accurately and filed in timely fashion.  Unfortunately,  your plan may have a number of different parties that provide service to the plan, including the TPA, your company’s attorney and financial advisor. Never assume that other parties will automatically provide you what you need for the form — or filing on your company’s behalf.