Art of the Qualified Plan Audit

Posted by Christopher J. Ciminera, CPA IKYMI: It’s with great pleasure that we congratulate Maria Hurd, CPA, RPA, our fearless employee benefit plan practice group leader and the guiding star for myself, Stacey Snyder, Saaib Uppal, Tyler Starr, and many others, for being recognized on Forbes’ List of America’s Best-in-State CPAs. This list is a … Continued

In Summary Change in Participant Counting Method: Defined contribution plans filing the 2023 Form 5500 must now use the number of participants with account balances at the beginning of the plan year to determine their filing status (small-plan, under 100, or large-plan, 100 or more), a shift from the prior rule that counted all eligible … Continued

The Office of the Chief Accountant (OCA) in the Employee Benefit Security Administration (EBSA) of the Department of Labor (DOL) has released a 2023 Audit Quality Study covering the quality of audits being performed by independent qualified public accountants (IQPAs).  This is the fourth study to be performed with prior studies being performed in 2015, … Continued

In Summary PEP Structure Under the SECURE Act: Pooled Employer Plans (PEPs) are a new type of “open” multiple-employer plan (MEP) created by the SECURE Act, which eliminates the “common interest” rule previously required for closed MEPs. A PEP must designate a Pooled Plan Provider (PPP) as the named fiduciary and plan administrator, offering employers … Continued

In Summary SECURE 2.0 Act Simplifies Hardship Withdrawal Administration: Section 312 of the SECURE 2.0 Act grants plan sponsors of 401(k), 403(b), and 457(b) plans relief by permitting reliance on an employee’s written certification that the distribution meets the requirements for immediate need, necessary amount (including taxes), and lack of alternative means, unless the administrator … Continued

Retirement plan administration is not a costless endeavor. Plan sponsors must administer the retirement plan following plan provisions, legislative requirements, and participant elections. To help administer the plan, plan sponsors hire service providers to help with recordkeeping, custody of assets, investment advisor tracking, and auditing the plan. Regulatory authorities want to promote retirement readiness with … Continued

Plan sponsors, third-party administrators, and other Form 5500 preparers take note! DOL representatives indicated that in some instances Part III – Accountant’s Opinion, Line 3(a) and 3(b) of the Schedule H is being filled out incorrectly. Marcus Aron (Division of Accounting Services) and Scott Albert (Division of Reporting Compliance) indicated at the 2023 Joint TE/GE … Continued

In Summary Service Provider and Fiduciary Best Practices: Service providers should have a formal, documented cybersecurity program, conduct annual risk assessments, and secure a reliable third-party annual audit of security controls. Essential elements also include strong access controls, encrypting sensitive data, and maintaining an effective business resiliency program to address disaster recovery and incidents. Selecting … Continued

In Summary Expanded Self-Correction Possibilities: Eligibility for the Self-Correction Program (SCP) significantly increased, primarily by extending the time frame for correcting significant operational failures from two years to three years following the failure’s plan year. The ability to use a retroactive plan amendment to correct an operational failure was also broadened by removing the prior … Continued

In Summary Financial Flexibility Offered to Qualified Individuals: The CARES Act permitted eligible participants affected by COVID-19 to take coronavirus-related distributions up to $100,000 from their retirement plans. Qualified individuals include those diagnosed, or those experiencing adverse financial consequences like being furloughed or unable to work due to lack of child care. Repayment is allowed … Continued