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