A 401k audit program is probably in your future

Recent economic and legal developments could put your 401K at risk

A 401k audit program is most likely going to become part of your future this year.  A recent United States Supreme Court ruling has paved the way for retirement plan participants to sue the sponsors of retirement plans for losses incurred if any fiduciary misconduct or mismanagement can be shown.  In order for companies to protect themselves from such litigation, a 401K audit program is going to have to be carried out, and the estimated cost of such audits are running about $15,000.  This is a considerable expense, but the risk of a lawsuit could be so much greater.  Can you afford that risk?

There is hardly a plan that has not taken a loss in the past two years from the financial crisis on Wall Street.  What has been a normal effect from such a financial downturn can put your company at risk if your 401K or other retirement plan has not been administered “by the book.”  Unintentional or not, any mismanagement of your plan’s fiduciary responsibility could make you susceptible to a lawsuit.  For that reason alone, there is no better time to outsource these functions and liabilities by joining forces with a PEO, such as CBR.  Joining CBR could save the cost of performing your own costly 401K audit.  Now is the best time to get more out of your PEO.  We can help you both with advice and counseling about your 401K plan, to reduce the possible legal exposure.  In the meantime, we can show you how we can reduce other costly administrative burdens, freeing up your time to do what you do best—growing your company.

CBR can reduce your exposure in two ways

By protecting yourself in an association with CBR, we look at your 401K to make sure it is in compliance, and we can also evaluate if your 401K is performing as well as it should.

The best way to avoid exposure is to discuss with CBR the advantage of shifting the risk and liability for your 401K over to CBR and completely removing yourself from the risk of getting sued.  How is this possible? It is possible through the Multiple Employer Plan, or MEP.  The MEP allows many employers to have their own plan, administered by CBR without the risks.  The CBR MEP has features that protect our client companies from traditional fiduciary and plan trustee liabilities.  If your current 401(K) plan is out of compliance, employees are able to pierce the corporate veil and go after the personal assets of the plan sponsor-usually the business owner.

This method of maintaining a 401K removes the risk and liability from the business owner. MEPs can have thousands of businesses participating and with the fiduciary and trustee responsibilities outsourced to CBR none of them would bear the responsibility or liability.  More importantly, the plan sponsor or business owner’s personal assets are protected from lawsuits by employees, and the business would not have the responsibility of paying a $15,000 401k “audit” fee to protect itself.

Benefits Management is CBR’s Expertise

Benefits management is one of the areas of expertise you will find at CBR, an Arizona, Nevada, and California PEO.  Staffed with experienced H.R. professionals, consulting with CBR can help you evaluate any possible exposure you may have.  H.R. professionals from CBR can meet with you to help evaluate your current plan.

Call an HR Outsourcing Consultant at (888) 700-8512 to review all the functions we can perform for you, cost-effectively, accurately, and in a timely manner.  Likewise, you can visit our website at www.cbri.com/contact and drop us a quick note and an H.R. outsourcing consultant will be glad to get right back to you.

You’ll soon see that there are many advantages to working with CBR.