I understand why some plan sponsors withhold information from their plan providers. Sometimes it\u2019s embarrassment. Sometimes it\u2019s fear of added cost. Sometimes it\u2019s just not knowing what matters. Unfortunately, in the retirement plan world, hiding information never protects you\u2014it only delays the damage.<\/p>\n
Controlled group issues, affiliated service groups, other retirement plans, ownership changes, payroll quirks\u2014these aren\u2019t \u201cnice to know\u201d details. They are foundational facts that determine compliance. When a provider doesn\u2019t have the full picture, they can\u2019t give accurate advice, and the plan sponsor is still the one holding the fiduciary bag.<\/p>\n
I\u2019ve seen plan sponsors omit information unintentionally and end up with failed testing, missed coverage issues, or deduction problems that snowballed over multiple years. I\u2019ve also seen sponsors intentionally stay quiet, hoping a problem wouldn\u2019t surface. It always does\u2014usually during an audit, a transaction, or litigation, when the stakes are highest.<\/p>\n
ERISA is unforgiving about ignorance. You don\u2019t get a pass because you didn\u2019t mention something. Providers rely on what they\u2019re told. If the information is incomplete, the advice will be too.<\/p>\n
Transparency with your plan provider isn\u2019t about trust\u2014it\u2019s about self-preservation. The more they know, the better they can protect you. The less they know, the more exposed you are.<\/p>\n
If you want fewer surprises from the IRS, the DOL, or a plaintiffs\u2019 lawyer, stop treating information like a liability. In the long run, secrecy costs far more than honesty ever will.<\/p>\n
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