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By Allan Peiser, MBA, CPA
Recent financial market conditions and uncertainties have thrown new risks into the best of your employees' financial plans.
As Plan Sponsor and primary fiduciary of your employees' 401K funds, it is extremely important for you to be in compliance with ERISA, DOL and other regulations relating to your fiduciary duties.
The Employee Retirement Income Security Act (ERISA) requires an independent audit of employee retirement benefit plans of companies that have 100 or more eligible participants at the beginning of a plan year.*
In addition, a recent Supreme Court case (LaRue vs. DeWolff Boberg and Associates, February 21, 2008) ruled that companies can be held liable if employees lose money in their 401K's due to negligence.
Auditing retirement benefit plans like a 401K is quite different than a general audit. Auditors need specific knowledge about benefit plan practices and operations as well as the standards, rules and regulations that apply to these plans.
The U. S. Department of Labor recommends the following criteria be covered in an audit:
- Whether plan assets covered by the audit have been fairly valued
- Whether plan obligations are properly stated and described
- Whether contributions to the plan were timely received
- Whether benefit payments were made in accordance with plan terms
- If applicable, whether participant accounts are fairly stated
- Whether issues were identified that may impact the plan's tax status
- Whether any transactions prohibited under ERISA were properly identified**
Goldin Peiser & Peiser, LLP has extensive experience in benefit plan audits and a commitment to understanding the most current rules and regulations.
Our high degree of specialization in this area means that clients receive important insights that add value to the plan.
For more information about Employee Benefit Plan Audits, contact Allan Peiser, Managing Partner at 972-818-5300 or APeiser@GPPcpa.com
*Plans with fewer than 100 eligible participants at the beginning of the plan year are considered to be a small plan for filing purposes. Audited financial statements are not required for a small plan filing if specific requirements are met under the small pension plan security regulation. Consult with your Plan Administrator and Trustee to validate the Plan Sponsor's reporting requirements.
**Source: www.dol.gov/ebsa/publications/selectinganauditor.html
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| Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose. |
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