Art of the Qualified Plan Audit

403(b)-Specific IQPA Audit Considerations Let’s start with a little background. Code Section 403(b) came first. In 1958, Congress made available a tax deferred savings device for employees of certain section 501(c)(3) organizations by adding section 403(b) to the Internal Revenue Code. Although deferred compensation plans for municipal employers had already existed for over a decade, … Continued

Background The SECURE 2.0 Act’s LTPT rule took effect on January 1, 2023, which means that as of January 1, 2025, any employee who has worked at least 500 hours (but no more than 999 hours) annually for two consecutive years (and has reached age 21 by the end of that two-year period) must be … Continued

What’s a Year-of-Service?….What Do You Need It to Be? Pension jokes and dad jokes can be corny, predictable, and unoriginal, but the truth is, they often tell the truth. One common pension joke is that if you ask an actuary how much is 2+2, he will respond: “How much do you need it to be?” … Continued

Introduction Managing a 401(k) plan involves careful oversight and adherence to regulations set forth by the Department of Labor (DOL). One critical aspect is ensuring timely deposits of employee deferrals into their retirement accounts. However, despite best intentions, mistakes can happen, leading to late deposits. The consequences of such errors can be significant. In this … Continued

Background The DOL’s rules and regulations require the notes to audited ERISA plans’ financial statements to include an explanation of differences, if any, between the information contained in the audited financial statements and the net assets, liabilities, income, expense, and changes in net assets reported on Form 5500 Schedule H. The inconsistencies are most often … Continued

Understanding the Accrual Basis of Accounting for Revenue Recognition Unlike the cash basis of accounting, which recognizes revenue and expenses only when money changes hands, the accrual basis accounts for transactions when they are earned or incurred, regardless of the actual cash flow. The Revenue Recognition Principle dictates that revenue should be recognized in the … Continued

Timing Differences Can Make a Difference The number of participants as of the beginning of the year determines whether the plan’s financial statements must be audited. Starting in 2023, eligible participants who do not have an account balance on the first day of the plan year are no longer included in the participant count used … Continued

Co-Authored by Maria Hurd, CPA and Tyler Starr, CPA 403(b) Plans: Has the Time Come to Eliminate the Disclaimer of an Audit Opinion? Fifteen years have passed since 403(b) plans became subject to the same financial reporting and disclosure requirements as 401(k) audits. Auditors have been disclaiming their audit opinion on account of the financial … Continued

The House with No Rules Once upon a long time ago, I fell asleep on the couch, as I often do. My astute baby girl speed-dialed my husband to report that she was in a house with no rules, because I had fallen asleep. Also, she said there was no need for him to hurry … Continued

ERISA Section 3(14) defines a Party-in-Interest more broadly than FASB Accounting Standards Codification (ASC) 850 defines Related Parties. Specifically, 29 CFR 1002(14) defines the term “party-in-interest” as follows:   Any fiduciary (including, but not limited to, any administrator, officer, trustee, or custodian), counsel, or employee of such employee benefit plan; A person providing services to … Continued