George Carlin had a joke that to get off a jury, you should just tell the Judge that you can determine a person is guilty by just looking at them.
Abernathy Daley 401(k) Consultants claim that 84 percent of U.S.-based retirement plans have at least one likely ERISA red flag from a regulatory and/or fiduciary violation by looking at their Form 5500.
Honestly, it’s much ado about nothing. They cite as a reg flag for plans that don’t cite they are participant-directed for investment, but there’s no legal requirement that a plan be 404(c) compliant nor that they offer a QDIA. There are glaring errors that can be found on Form 5500, but these aren’t them.
I always say that every 401(k) plan has an issue that you can find if you want to, but it’s not usually gleaned from a Form 5500, because those are glaring errors such as late deferral deposits or not having the right bond amount.
You can be like Dean Wormer and place 84% of plans on double secret probation, but a Form 5500 isn’t such a smoking gun.
