In July 2019, the AICPA issued the Statement on Auditing Standard (SAS) 136 – Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans subject to ERISA standards. The primary goal of the standard is to improve audit quality by making the auditor’s report clearer and easier to understand for the users of …
In the wake of the COVID-19 pandemic and the resulting economic uncertainty, employers are faced with decisions that could have significant impacts on their 401k retirement plans. A serious decision that employers face is a potential employee reduction. It is important to consider the impact this decision can have on the retirement plan. A reduction …
From time-to-time employers deem it necessary to change administrators for their employee benefit plan. This may affect the election choices of the employees. A Third-Party Administrator (TPA) is hired by an employer to deal with the behind the scenes events that occur while handling the retirement plan. They assist with the plan design and are …
When administering their 401(k) plan, one of the most common mistakes that employers make is allocating plan contributions to a participant account using the incorrect employee compensation. The most common occurrence is when an employer mistakenly excludes forms of compensation such as bonuses, overtime, or commissions that are defined as eligible compensation in the company’s …
Many plan participants may be surprised to learn that their employer can discontinue their 401k plan at their own discretion. The IRS considers a plan terminated once an official date of termination is established by the sponsor, the benefits and liabilities under the plan are determined, and all assets are distributed as soon as administratively …
Form 5500 is an annual return/report that employee benefit plans are required to file with the Department of Labor’s (DOL) Employee Benefit Security Administration (EBSA) division. Employee benefit plans subject to Employee Retirement Income Security’s Act (ERISA) standards are required to file Form 5500 on an annual basis. This report serves to satisfy necessary disclosures, …
If your Company sponsors an employee benefit plan (this includes 401(k) plans), an audit of that plan may be required. What triggers the need for an audit? The number of participants. Plans with 100 or more participants at the start of the plan year are considered “large” and generally require an annual audit, while plans …
Proper preparation for your year-end 401(K) audit can lead to a much smoother and effective audit experience for both your company and your auditor. A constant line of communication leading into the audit will allow both parties to be as efficient as possible, especially when it comes to performing fieldwork. In addition to what your …
There are a few simple steps that can be taken during the planning phase of the audit in order to gain efficiencies during the fieldwork phase. You should be in communication with your auditor before the Plan’s year-end date. This is the best time to come to an agreement about the terms, timing and fees …
When a 401(k) or other retirement plan requires an annual audit, a plan administrator may have a choice to engage an audit firm to perform a full-scope audit or a limited scope audit of the financial statements. To be qualified for a limited scope audit, a bank or insurance carrier must act as a trustee …