The Importance of Knowing Your Plan’s Definition of Compensation

As I reflect on my last 401k audit season, I remember running into some operational issues that were a result of plan administrators not using the correct form of compensation, as defined by their plan document, while calculating employee and employer contributions. Using the correct form of compensation while making contributions is important because if …

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How to Handle a Blackout Period

What is a blackout? A blackout is a period of three or more consecutive business days during which participants’ are temporarily limited in or restricted from the ability to perform the following activities: Directing or diversifying investments Obtaining distributions Obtaining loans What actions must Plan Administrators take in order to remain in compliance during a …

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The Importance of Obtaining a Quality Audit

On November 16, 2015, the Department of Labor’s (“DOL”) Office of Chief Accountant sent an e-mail to all plan administrators of plans which are required to have an annual financial statement audit alerting them of the importance of obtaining a quality audit from a qualified and experienced CPA firm. This is primarily in response to …

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Participant Loans – IRS Requirements

If you participate in your Company’s 401k Plan, you are probably already aware that your Plan may offer an option for you to take out a loan from your 401k balance. These loans are tax free and typically require you to pay your loan back plus interest over a certain period of time. There are …

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Compliance for Small Company Employee Benefit Plans

As another employee benefit plan season draws to a close, I was reflecting on the many compliance errors that we find each year while auditing plans. The plans that require audits are typically larger employers with over 120 employees. These plans are typically administrated by professionals with significant experience in their fields. And yet, due …

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401K Pre-Approved Plans 2016 Deadline

Some employee benefit plans are set-up as pre-approved plans. Typically this includes prototype and volume submitter plans. This basically means that the plan is operating under a Plan Document from a financial institution, adviser or similar provider that has requested IRS opinion or advisory letters on the tax status of the Plan. These types of …

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FASB’s Employee Benefit Plan Reporting Simplification

On July 31, 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient. The ASU was in …

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Do I need an audit?

As a sponsor of an employee benefit plan, along with annual reporting requirements, you may be required to undergo an audit of your plan’s financial statements. What are the reporting requirements and what triggers an audit? This varies depending on the type and size of the plan you sponsor. One participant plans (a business owner …

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Where Are You Saving Your Money?

As an auditor of employee benefit plans, I often talk with clients about their plan’s participation rates and suggest ideas on how to increase participation. As part of my daily routine, I read numerous articles from different financial sources. I came across a CNBC article published on July 29th, 2015 that I found to be …

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