May/June 2017

PLANADVISER interviews Lisa Tavares on pitfalls for sponsors to avoid in plan management

1 min

Venable partner Lisa Tavares was interviewed in the May/June 2017 issue of PLANADVISER on common pitfalls for sponsors to avoid in plan management. Tavares says plan sponsors sometimes get complacent and put their plans on autopilot, which can lead to operational mistakes. She advises investing in the time and effort to make necessary fixes and take steps to avoid mistakes in the future. "Primarily, the incentive for sponsors is to make sure the plan is in compliance, before the IRS [Internal Revenue Service] or DOL [Department of Labor] gets to them, so the sponsor can mitigate any fines or penalties for the errors."

To avoid confusion over the definition of compensation, Tavares advises plan sponsors to review and understand the definition of compensation found in the plan documents. "Unless an employer makes a change to its payroll system or the plan, that review can be done every two years," she said. For plans that automatically enroll employees, she recommends advisers double check to make sure it actually happens. "Quarterly or semi-annually, I suggest that sponsors take the time to check that every eligible employee has been automatically enrolled and no eligible employee was missed."