In 2013, Blue Prairie Group (“BPG”) was retained by a Pennsylvania-based non-profit organization to serve as their 403(b) retirement plan advisor. At the time of the engagement, the CFO of the organization was concerned about meeting the DOL/IRS regulations post-2009 and asked BPG to conduct a full Compliance Review to uncover any and all qualified defects. At the time, the organization’s plan had roughly $25 million in plan assets and 150 participants.


We reviewed the plan documents, vendor processes and internal HR processes and uncovered a number of problems with the plan:

  • Form 5500 – the short form had been filed since 2009. It had been determined that the client had more than 100 employees during 2009-2013 and the longer form should have been filed along with an audit.
  • Resolution – We helped the client find an auditor who conducted audits back to 2009 and filed under the Delinquent Filer Voluntary Compliance Program with the DOL.
  • Non-Discrimination Testing – tests had not been completed since 2009.
  • Resolution – Worked with a TPA and completed the testing. No test failures were found.
  • Late Contributions – It was found that the client took, on average, 35 days to make the employee contribution where three days is most appropriate.
  • Resolution – This operational failure was corrected under the VCP and lost earnings were given back to participants.
  • Participants Over-Matched and Failure to Execute Employer’s Election to Defer – certain employees received an excess matching contribution where others failed to have their elective deferrals withheld on a portion of their commissions.
  • Resolution – Both failures were corrected through the VCP process, using different calculations to make the corrections.
  • Hardship Withdrawals – employees who took hardship withdrawals were never suspended from contributing to the plan for six months as directed by the plan document.
  • Result – Corrected through VCP by refunding participants the elective deferrals, match and lost earnings on both.


Because the client self-corrected, the cost to correct these errors was significantly less than if they were uncovered during an audit. There are processes now in place to comply with DOL/IRS regulations going forward.