The professional human resources exam is a comprehensive testing for human resource employees who wish to increase their competitiveness in the workforce. The SPHR or senior professional in human resources is issued by the Human Resource Certification Institute. Candidates must know all the current laws, rules and regulations related to the every aspect of the employment process. The current exam covers details of the labor relations process, going back as far as the 1900s. The labor movements covered on the exam in only based on United States employee and management relations. There are a lot of important figures, facts and critical events that candidates must know.
A significant section you must have knowledge on is the 401k section of employee compensation. Remember that your employee Retirement plan trust is an legal entity manages the assets of a 401(k) plan. These assets must be separated from the assets of the corporation that sponsors the plan. Every plan should have a Plan document that defines the plan, stating who is eligible, what matching contributions the company will make, and so forth.
If this document is improperly signed, that alone can result in your plan being disqualified. The summary plan description is the laypersons overview of the plan, other than promotional material, that prospective participants receive. The IRS form 5500 is an annual report to the government. What are the employees investment choices or funds selected by the plan trustees. Who is the plans sponsor or business organization that offers the plan to its employees.
The administrator is responsible for making sure the plan is in compliance with federal regulations. Some problems with a plan, such as an accounting error, can be easily corrected. If the plan has an under-performing mutual fund investment, the administrator can simply change to a more successful fund. However, other situations are more serious. The number of IRS investigators auditing 401(k) plans for compliance has increased fivefold since 1990. If the IRS determines, for example, that a plan favors executives and owners unfairly, it can revoke the tax exempt status of the funds. This form of enforcement has generated an additional $200 million for the government. Thus, the responsibility for plan compliance is quite serious. Plan Changes in tax and employment law can call for continual adjustment of the plan. Willingness to review and update the plan is where many administrators fall short.
Plan sponsors tend to focus on minimizing administrative costs instead. Record Keeping administrator keeps track of the accounts of individual participants, pooling together all funds under the 401(k) plan and jointly investing them in mutual funds. The mutual funds cannot track the accounts of the individual 401(k) plan investors, so that important task falls to the plan administrator. Participant Service 401(k) administrator has the ongoing task of educating the participants about the services available under the plan. The bottom line is that administering a plan is a demanding role, and the least expensive administrator is unlikely to provide an adequate service level. With high maintenance being the foremost criticism of such plans, the lowest-cost provider can be more expensive in the long run.
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Jacquelyn Donner, SPHR