The compliance questionnaire collects essential information to confirm your 401(k) plan meets IRS requirements. This data is used for required annual nondiscrimination testing and the preparation of Form 5500, which must accurately reflect the plan’s details for the year. Since factors like Highly Compensated Employees (HCEs) and ownership status can change from year to year, it’s important to provide updated information annually. Completing the questionnaire helps maintain compliance and helps to create accurate reporting.
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