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Often the responsibility to review a company's retirement plan falls on its accountant. CPAs can use this checklist to help their employers or clients determine whether they should update their 401(k) to meet participants' needs. The following suggestions address plan investments, administration, communications and, more important, the sponsor's fiduciary responsibility.
To ensure a 401(k) plan is up to date, CPAs should advise clients or employers that sponsor such plans to
* Maintain an investment policy statement. This document establishes the plan's criteria for monitoring investments, the performance expectations, the process of reviewing investments and the benchmarks to guide investment changes.
* Provide a diversified menu of investment options. Plan sponsors should offer a minimum of 12 choices to allow participants to diversify across all investment categories-value, blend, growth and fixed income.
* Offer investments from a...