401k/403b Benefit Plan Compliance

Generally, Federal law requires employee benefit plans with 100 or more participants to have an audit as part of their obligation to file an annual return/report (Form 5500 Series). If your employee benefit plan is required to have an audit, one of the most important duties of the plan administrator is to hire an independent qualified public accountant. The sponsor of the plan is the plan administrator under the law unless another individual or entity is specifically designated to assume this responsibility.

Some helpful resources:

Why is the choice of auditor important?

A quality audit will help protect the assets and financial integrity of your employee benefit plan and ensure the necessary funds will be available to pay retirement, health, and other promised benefits.

A quality audit will also help you carry out your legal responsibility to file a complete and accurate annual return/report for each year. Because an incomplete, inadequate, or untimely return may result in penalties against you, selection of an experienced auditor is important.

The DOL’s EBSA continues its enhanced programs aimed at assessing and improving the quality of employee benefit plan audits. According to EBSA, 64 public accounting firms audit more than 100 plans that cover approximately 25,000 audits. The remaining 51,000 plan audits are performed by nearly 10,000 different CPA firms, 8,000 of whom perform 5 or fewer audits. EBSA utilizes both top-down and bottom-up strategies in selecting and evaluating ERISA audits. Ask your auditor how many plans they audit, experience and education matter.

http://www.dol.gov/ebsa/publications/selectinganauditor.html