Many small businesses have 401(k) plans in place to help employees save for retirement. And even solo entrepreneurs may use such tax-advantaged retirement plans to shelter their profits and build up a retirement nest egg for themselves. Looking toward 2017, now’s the time for certain actions to be taken. Here are some to consider if you have a 401(k) plan or are thinking of setting one up.

For the business

Now is the time that employees must commit to their 2017 elective deferrals. The maximum contribution amounts for 2017 remain unchanged from 2016: $18,000 ($24,000 for those who will be at least 50 years old by the end of the contribution year).

Determine now the formula that the company will use to match employee contributions. If the company uses an automatic enrollment plan, certain matching contributions are required.

For other plans, where you have flexibility in making matching contributions, if any, keep in mind the maximum employer contribution for 2017 is slightly higher than it was in 2016: $54,000 (up from $53,000). Thus, if you have a solo 401(k) plan and you’ll be 49 years old by the end of 2017, your total contributions to the plan (comprised of employee and employer contributions) cannot exceed $54,000. Of course, an owner’s compensation (if the business is incorporated) or net earnings from self-employment (if the business is not incorporated) must be sufficient to permit maximum savings.

Most small businesses do not provide these maximum contributions for employees even though they have such flexibility; they may cap employer contributions at say 3% or 6% of compensation up to a set dollar limit.

It is also critical for plan administrators to review the plan’s investment offerings. For many small companies, owners serve as plan administrators and can be held personally liable if the offerings fall short of certain standards (e.g., fees are higher than comparable investment options that could have been offered). The U.S. Supreme Court said that a plan administrator has a “continuing duty to monitor” mutual funds at a 401(k) plan for unnecessarily high fees and that the plan administrator can be held personally liable for failing to do so.

What to do now: If you are the administrator of your company’s 401(k) plan, review the investment options planned for the coming year, and make any necessary changes. Communicate with employees about the 401(k) plan for the coming year. Lay out company matching contributions, if you plan to make them, and provide a menu of investment options (e.g., various mutual funds, annuities, employer stock). Find details about meeting your fiduciary responsibilities from the U.S. Department of Labor (DOL), including the necessary materials and communications for employees.

 For yourself

The amount available for retirement income from your 401(k) plan depends on your contributions and how you invest them. Make it a practice to review your holdings each year (if not more frequently) so that you can make changes as needed. FINRA offers a guide to evaluating investment performance.

New 401(k) plans

If you don’t have a 401(k) in place for 2016, it’s not too late to do so. You can set up the plan as late as December 31, 2016, by signing the necessary paperwork. While employee contributions must be added promptly (the deadline varies for small and large employers), you have until the extended due date for the company’s 2016 income tax return to make employer contributions. Find more information about 401(k) plans from the IRS.

Be aware that a new final investment advisor rule for brokers, which is set to go into effect in April 2017 (unless blocked by the new administration or a court challenge),  may limit where you set up your plan and what you will pay in administrative costs.

Conclusion

Confused what to do about your existing plan or a new plan? Talk with your tax advisor.