Art of the Qualified Plan Audit

Knowledge is Power Plan sponsors should strive to prevent plan operational mistakes by training their plan officials to recognize the relevant risks and to have a heightened awareness of the potential for error in each area including eligible compensation, participant eligibility, contribution calculations, missed required distributions, incorrect or ineligible distributions, failure to use forfeitures, and … Continued

Forfeitures are a routine, but often misunderstood, feature of all qualified retirement plans. While they may seem like a minor administrative detail, how forfeitures are handled can directly impact employer contribution costs, participant balances, and overall plan compliance. Recent regulatory attention has also made forfeitures a renewed focus area for the DOL and the IRS. … Continued

It’s Not Fair! “But my plan’s brokerage account investments don’t affect the participants!” or “I didn’t have to allocate any profit-sharing dollars, and an audit of my pooled plan would penalize me for my generous selection of excellent investments.” Unfortunately for the business owner in the above two examples, they wear two hats, one of … Continued

403(b) Plan Eligibility Exclusions Before SECURE 2.0 403(b) plans are bound by a universal availability mandate, whereby if one employee has the opportunity to defer, all employees must have the opportunity to defer. Since 1989, the universal availability mandate could be subject to the following exceptions, which allowed 403(b) plans to exclude:   Student employees; … Continued

Long-term, Part-time employees became eligible for the first time in 2024 for for-profit corporations and in 2025 for nonprofit corporations. 403(b) plan sponsors’ auditors will request backup for LTPT employee identification, eligibility, and their effective opportunity to defer during next year’s audits. This blog will explain the rules and the best practices for employers challenged … Continued