Why Ownership Is Confirmed Each Year
Changes in company ownership can have a direct impact on your retirement plan. Letting Retirement Management Services (RMS) know promptly helps ensure the plan stays compliant, accurate, and aligned with your business goals.
1. Protects Plan Compliance
Ownership changes can trigger new testing requirements, controlled group rules, or even plan disqualification issues if not handled correctly. Early notification allows RMS to evaluate the impact and address compliance requirements proactively.
2. Avoids Costly Corrections and Penalties
Unreported ownership changes may lead to incorrect nondiscrimination testing, contribution errors, or missed filings. Catching these issues early can prevent IRS or DOL penalties and expensive corrective actions later.
3. Ensures Accurate Plan Administration
Ownership affects eligibility, vesting, compensation, and Highly Compensated Employee (HCE) status. RMS needs updated ownership information to administer the plan accurately and fairly for all participants.
4. Supports Mergers, Acquisitions, and Restructuring
If the ownership change is part of a sale, merger, or reorganization, RMS can help determine whether plans need to be merged, frozen, terminated, or amended—and guide you through those decisions smoothly.
5. Aligns the Plan with Business Objectives
Ownership transitions are a great time to review whether the current retirement plan design still meets the needs of new owners and leadership. RMS can help evaluate opportunities to improve outcomes or reduce risk.
6. Creates a Clear Audit and Documentation Trail
Annual ownership confirmation provides documented evidence that the plan sponsor reviewed and validated ownership information—an important safeguard during audits or regulatory inquiries.
Bottom line:
Confirming ownership with RMS every year—even when nothing has changed—helps protect your retirement plan, reduce risk, and ensure continued compliance without surprises. Contact your Account Executive if you have any questions.
Leisha Gosling has worked for over 30 years in the field of Defined Contribution Plan Administration. She graduated from University of Louisville with a Bachelor of Science in Business Management and from Sullivan University with a Master’s degree in Business Administration. Leisha joined RMS as a New Business Consultant in 2020. Her areas of expertise include qualified retirement plan administration and consulting, plan document underwriting, and compliance. She focuses the majority of her time at RMS on new client implementation and onboarding as well as marketing and new business initiatives. She also maintains the plan document used by the firm and performs special research projects. Leisha has been awarded the designations of Qualified 401(k) Administrator and Qualified 401(k) Consultant from the American Society of Pension Professionals & Actuaries and Certified Employee Benefits Specialist from the International Foundation of Employee Benefit Plans.
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