Now is the Time for Retirement Plan Year-End Conversations

With the end of the calendar year rapidly approaching, retirement plan sponsors with calendar plan years must prepare for important annual tasks. The upcoming timeline includes:

• December 31: the plan year wraps up.
• The year-end Benefits Committee meeting: the Committee carries out its fiduciary responsibilities by reviewing plan amendments, activities, and performance metrics.
• Late January: the plan sponsor provides the actuary with information necessary to perform the annual valuation and funding calculations.

To illustrate why year-end preparation is so important, consider the activities that begin shortly after the plan year ends.

At the end of January, the plan sponsor typically extracts and finalizes the census data used for the annual valuation. This timing allows year-end transactions and administrative updates to be recorded, while also providing an opportunity to review and improve data quality before the valuation process begins.

The actuary then reviews and validates the census data, performing a detailed analysis and data scrub to establish key metrics such as funded status, liability measurements, and Pension Benefit Guaranty Corporation (PBGC) premium estimates. Before the data is finalized, the actuary often sends the plan sponsor extensive questions to address data gaps. These inquiries can be lengthy and repetitive, requiring significant coordination among benefits, payroll, and Human Resources information Systems teams.

Because the Benefits Committee will likely review the upcoming valuation process during its December meeting, the fall months are the ideal time to conduct key data checks, including:

Missing data: What participant information is missing that could impact the accurate calculation and payment of benefits?

Trust data: Are benefit recipients correctly classified? Are they living, do beneficiary records exist, and is the data transaction ready – should a de-risking decision be made?

Overdue distributions: What is the status and value of benefits owed to participants and beneficiaries who have reached or exceeded Normal Retirement Date but have not yet commenced payments?

Completing these reviews and preparing results for the December Benefits Committee meeting can be time-consuming and burdensome for benefits teams, particularly when occurring alongside Open Enrollment activities.

Fortunately, plan sponsors do not have to manage these challenges alone. MarketSphere Retirement Reunification Services helps plan sponsors close data gaps, fulfill fiduciary responsibilities, maintain participant contact, and locate missing participants and beneficiaries.

MarketSphere can develop and deliver a committee-ready analysis for Benefits leadership to present to the Committee. Learn about MarketSphere’s Retirement Reunification Services and contact our team to get started and help ease these burdens and act in the best interest of plan participants and beneficiaries.