It’s a good idea for companies to self-audit their retirement plans to determine if there are any problems — before they hear from federal examiners. That way, they can protect their company’s retirement savings. Here are six common operational faults found by the IRS and the Department of Labor:

1. Late deposit of deferrals. Many employers do not realize that deferrals must be deposited as soon as reasonably possible after the pay date.

2. ERISA violations. Section 404(c) of the Employee Retirement Income Security Act(ERISA) permits retirement plans to transfer the responsibility and liability for selecting investment options to participants if certain requirements are met. Many companies believe that they will be afforded protection for participants’ investment decisions under this provision. However, many plans do not comply with the requirements of Section 404(c).

3. Employees versus independent contractors. There are strict rules to determine whether a worker is an employee or independent contractor for tax purposes. The IRS looks at many factors in making a determination. If your company hires an independent contractor and the IRS later reclassifies the person as an employee, your firm can be hit with a tax bill for unpaid taxes, interest and penalties. You might also be liable for state taxes, unemployment taxes and employee benefits, such as retirement plan contributions.

4. Services performed through a professional employer organization (PEO). Hiring employees through a PEO for long periods of time may not eliminate your obligation to make retirement plan contributions for these workers.

5. Improper correction method. Employers can correct compliance problems in qualified plans without requesting advance IRS approval. However, they must use the proper correction method.

6. Default account. Plans often specify a money market account or a GIC (guaranteed investment contract) as the plan’s default account. But the fiduciaries for 401 (k) plans must prudently invest non-directed participants’ accounts, even if the plan document provides for a “default” account.