Administering a benefit plan is a complex task. It can be difficult to keep plan documents and procedures up to date. A steady stream of changes to federal laws, including the Internal Revenue Code (IRC), the Age Discrimination in Employment Act (ADEA), the Uniformed Services Employment and Reemployment Rights Act (USERRA) and the Americans with Disabilities Act (ADA), adds to this complexity. Even when documents reflect current policies, some fund office staff may not follow the new procedures.
Why do you need an administration review?
Any mismatches between your plan documents and plan procedures can lead to misunderstandings and inefficiency. They can also make the plan vulnerable to government penalties and participant litigation. Increased enforcement efforts and plan audits by the Internal Revenue Service (IRS) and Department of Labor mean that it is more important than ever before to document plan procedures and keep them up to date.
Crosscheck is a benefit administration review program for governmental qualified retirement plans, Section 457 deferred compensation plans, Section 403(b) tax-sheltered annuities, and health benefit plans. This program helps fund administrators to:
- Determine whether the plan complies with federal law requirements
- Confirm that the plan procedures correspond to what the plan provides
- Reduce expenses by identifying ways to streamline plan administration
- Offer a refresher course and reference guide for the benefit plan staff
- Demonstrate the plan sponsor's good-faith effort to comply with IRS rules
The Crosscheck Review Process
- Step 1: Assessing Needs
The Crosscheck process starts with a discussion between the benefit plan staff, legal counsel and Segal compliance consultants to get a detailed picture of how the plan is administered. This helps to identify areas of particular concern and liability and determine how best to use Crosscheck. Based on the results of this discussion, Segal will work with your legal counsel to create a proposal and determine how results will be presented.
- Step 2: Reviewing Documents and Administrative Materials
Segal will review your plan documents, summary plan description, and all related administrative materials, such as letters and notices to participants. This review forms the benchmark when looking at your plan's actual operations and plan procedures. The review addresses more than 25 topics, including government reporting requirements, fiduciary responsibilities and duties, claims and appeals procedures and rules governing eligibility and benefits.
- Step 3: Reviewing Administrative Practices
In the next phase of Crosscheck, Segal interviews the individuals who are responsible for day-to-day plan operations. We conduct the interviews in a conversational and free-form manner, but structure our questions to make sure we cover the administrative and regulatory areas of most significance to your plan.
- Step 4: Presenting the Results
We present our findings and analysis in a Crosscheck Report prepared with the assistance of your legal counsel. The Report is tailored to your fund and, at your and legal counsel's option, may include:
- An inventory of the documents that were examined
- Summaries of interviews conducted
- A detailed discussion of statutory and regulatory requirements
- A review of what the plan document provides
- An assessment of whether the day-to-day plan operations correspond with legal requirements and plan documents.
- Areas of administration that require attention
- Our recommendations to legal counsel for resolving potential problems.
Since the Report is a detailed study of the plan document and operations, plan administrators may use it as a reference or staff training tool that can streamline plan administration, increase efficiency and reduce expenses while demonstrating a good-faith commitment to comply with federal regulations.
For more information, contact the Segal office nearest you.