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Risk and Compliance

Risk and compliance management are critical to administering a 401(k) plan. Risk management involves identifying and mitigating risks that could impact the plan and its participants. Compliance management, on the other hand, ensures that the plan adheres to all applicable regulations, laws, and industry standards.

To effectively manage risk and compliance in a 401(k) plan, plan sponsors should establish a comprehensive risk management framework that includes the following steps: Risk Identification, Risk Evaluation, Risk Mitigation, and Risk Monitoring.

Compliance management involves ensuring the plan complies with all applicable laws and regulations. To achieve compliance, plan sponsors should Stay Informed, Develop Policies and Procedures, Conduct Audits, and Take Corrective Action.

Effective risk and compliance management can help protect the plan and its participants from financial losses and legal penalties. It can also improve plan performance, enhance plan transparency, and increase participant confidence in the plan.

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