Keep Your Plan Compliant Year After Year

Powers Financial Group, LLC manages ongoing administration and testing for retirement plans in Texarkana.

Once your retirement plan is active, it requires continuous administration to stay compliant with federal law. Every year, your plan must pass tests that confirm contributions are distributed fairly, limits are not exceeded, and required disclosures reach participants on time. Mistakes in this phase lead to IRS correction programs, penalties, and refunds that disrupt your budget and erode employee trust.

Powers Financial Group, LLC handles the annual testing duties that keep your plan within ERISA rules. This includes ADP/ACP testing, 415 contribution limit checks, Top Heavy analysis, 404 deduction calculations, 410(b) coverage testing, required minimum distributions, loan tracking, hardship distributions, vesting schedules, trust accounting, annual financials, and all required reporting such as the 5500 Series, Summary Annual Reports, and 1099 forms. The firm also monitors contributions and maintains accurate participant records throughout the year.

If you need a partner who understands the scholarship behind ERISA and can prevent costly errors, contact Powers Financial Group, LLC to discuss your plan administration needs.

The Testing That Protects Your Plan Status

Annual administration involves running multiple tests that compare highly compensated employees to non-highly compensated employees. If your plan fails ADP or ACP testing, refunds must be issued before the next tax year. If contributions exceed the 415 limits, corrections must be filed. If the plan becomes Top Heavy, minimum contributions may be required. Powers Financial Group, LLC runs these tests after the plan year closes and notifies you of any required actions before deadlines pass.

After testing is complete, the firm prepares the Form 5500 and attaches all required schedules. You receive a Summary Annual Report to distribute to participants. The firm also generates 1099-R forms for any distributions that occurred during the year. These documents satisfy Department of Labor and IRS reporting requirements and provide a record of plan activity that auditors may request.

Trust accounting ensures that contributions, earnings, distributions, and fees are tracked accurately. The firm reconciles the trust balance with the recordkeeper each quarter and investigates any discrepancies. Loan tracking confirms that participants are making payments on schedule and that outstanding balances are reported correctly. Hardship distributions are reviewed to confirm they meet IRS safe harbor criteria. This level of attention prevents errors that can accumulate over time and become difficult to correct.

Business owners in Texarkana want to know what happens during annual administration and how the testing process protects their plan. The following questions address the ongoing work required to remain compliant.

Compliance Work Brings Up Real Concerns

ADP testing compares the average deferral rates of highly compensated employees to non-highly compensated employees. ACP testing does the same for employer matching contributions. If the highly compensated group defers or receives matches at too high a rate, refunds are required.
What is ADP and ACP testing?

Powers Financial Group, LLC notifies you immediately and explains the correction options. Most failures are resolved by issuing refunds to highly compensated employees or making additional contributions to non-highly compensated employees before the next plan year.

What happens if the plan fails a test?
Trust accounting tracks every dollar that enters and leaves the plan. It ensures that participant balances match the trust balance and that fees are allocated correctly. Accurate trust accounting is required for Form 5500 preparation and audits.
Why is trust accounting necessary?
The firm calculates required minimum distributions each year for participants who have reached the required age. You receive a list of participants who must take distributions and the firm coordinates with the recordkeeper to process payments.
How do you track required minimum distributions?

The 410(b) test confirms that your plan benefits a broad cross-section of employees and does not favor only highly compensated staff. Powers Financial Group, LLC runs this test annually and recommends plan design changes if coverage is at risk.

What is the 410(b) coverage test?

Retirement plan administration requires lifelong dedication to ERISA rules and a commitment to accuracy. Powers Financial Group, LLC provides the testing, reporting, and trust accounting your plan needs to stay compliant year after year. Get in touch to review your current administration process.