Problem Analysis Summary
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Problem Analysis Project Summary
In the retirement planning field there are many problems that a Third Party Administrator will and often does encounter. One such problem is that a company pays an investment advisor to set up a retirement plan for his or her company. A contract is signed between the owner and the investment advisor. A contract is not a legal plan document in the eyes of the government.

In order for a company to have a retirement plan that complies with the ERISA laws (Employee Retirement Income Security Act), the IRS (Internal Revenue Service), and the DOL (Department of Labor) a Trust Identification Number must be established, tax form 5500 must be filed with the IRS, and a plan document must be signed. The Trust Identification Number is identical to a Social Security Number; it is how the IRS recognizes the plan document. The tax form 5500, allows the IRS to see the number of assets the plan has, how many distributions were made in the plan year, and the gains and/or losses that were applied to the assets. The plan document dictates who is eligible to participate in the plan, what the vesting schedule is, and if the plan allows for distributions before the normal retirement age. Along with the plan document, a Summary Plan Description (SPD) is required to be distributed to each employee. The SPD is a summarized version of the plan document.

The owner of the company will be liable for heavy fines accumulating to thousands of dollars for not having a proper plan document in place. The client should employ a firm that is permitted to practice before the IRS and will help the client correct the error. The firm should use the VFCP (Voluntary Fiduciary Correction Program) that allows the company to “voluntarily comply with the Employee Retirement Income Security Act (ERISA) by self-correcting certain violations of the law” (DOL, 2002).

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Retirement Plan And Trust Identification Number. (June 9, 2021). Retrieved from https://www.freeessays.education/retirement-plan-and-trust-identification-number-essay/