Retirement Plan Audits
Does your company’s retirement plan require an audit? An audit is required under federal law to ensure the plan functions, operations and processes are in compliance with established regulations.
Who Needs an Employee Retirement Plan Audit?
According to the Department of Labor, if the number of qualified employees has changed in the last year, the rules governing the employee Retirement plan may require changes, too. An employee retirement plan audit is generally required if your company has more than 100 eligible participants on the first day of the plan year.
The plans that may require an audit include:
Profit sharing plans
Defined contribution plans
Defined Retirement plans
Why do you Need an Audit?
Large plans must complete Schedule H with the Form 5500 Annual Report and are required to have an audit. Small plans must complete Schedule I with the Form 5500 and are not required to have an audit.
The participant count used to make these determinations includes all employees who are eligible to participate in the plan, regardless of participation. It also includes all participants who have separated employment, but still have a balance within the plan.
Your plan’s third party administrator (TPA) should inform you when an audit is required. However, if you believe you are close to being considered a large plan, you should review your plan activity and contact your TPA sooner rather than later.
Select the Right Retirement Plan Auditor.
Once it has been determined that your company needs an audit, the first step is to select an independent CPA firm to perform the audit. It is important to select a firm with the necessary skills and retirement plan experience to provide the services your plan needs.
It may seem like an easy solution to use the CPA firm you use for your corporate accounting needs. However, that firm may not have the required skill or expertise to audit your retirement plan effectively and efficiently. It is worth the extra effort to find a firm that will provide the results your plan needs.
If you would like more information or if you are seeking an experienced team that specializes in employee Retirement plan audits, Smith Schafer wants to help! Our firm has committed a substantial component of our staff to retirement plan audit services. Smith Schafer has provided audit, consulting, third party administrative and internal audit services for company retirement plans since 1971.
Contact our Retirement Services Team for additional information. We can take a second look at your current plan and fees at any time.
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