It’s been happening a lot lately: a plan sponsor with several participating employers, not realizing that participation agreements for some of these employers weren’t done. This is just a silly mistake to make.

While some plan documents may recite all the participating employers in the plan document, most don’t. They require participation agreements (they also may be called adoption agreements) for each participating employer. I’ve had several voluntary compliance program submissions with the Internal Revenue Service just because of a failure to properly secure a participation agreement for one or more employers. It’s a costly mistake that shouldn’t happen.