Art of the Qualified Plan Audit

In Summary Administrative Improvements for Retirement Plans: Additional time is allowed for employers to adopt plans after a taxable year’s close, provided it’s before the extended tax return due date. The IRS and DOL were directed to permit certain groups of defined contribution plans to file a single aggregated annual return under specific conditions regarding … Continued

In Summary Expanding Access to Retirement Plans for Employers: The SECURE Act permits unrelated employers to participate in Pooled Employer Plans (PEPs), easing previous restrictions on Multiple Employer Plans (MEPs). This change, coupled with the elimination of the “One Bad Apple” rule and the requirement for only one Form 5500 and plan audit, aims to … Continued

In Summary Hardship Withdrawal Access Expanded: The Bipartisan Budget Act of 2018 significantly expanded participant access to retirement funds in hardship situations. Key changes include eliminating the mandatory six-month suspension of deferrals after a hardship withdrawal and permitting plans to remove the requirement to maximize plan loans first. These rules became mandatory for plan years … Continued

In Summary New Audit Standard Introduced: SAS 136, effective for plan years ending on or after December 15, 2021, replaces the limited-scope audit with the ERISA Section 103(a)(3)(C) audit. This change mandates the auditor to provide an opinion on all financial information except for the carved-out certified investment data, which differs significantly from the former … Continued

In Summary Requirement for the Independent Audit: The Employee Retirement Income Security Act (ERISA) mandates that large retirement plans, generally those with 100 or more participants at the beginning of the plan year, must have their financial statements audited. These audited statements are required to be attached to the Schedule H of the annual Form … Continued

Posted By: Chris Ciminera, CPA, QKA A major benefit to employees who are participating in a qualified retirement plan is the deferral of taxes. Pre-tax deferrals, employer contributions, and the related earnings grow tax-free until the amounts are distributed from the plan. Unfortunately, when a participant takes a distribution upon retirement or an early distribution … Continued

In Summary How to Prevent Participants and Beneficiaries from Becoming Missing: Maintain accurate, current census information by regularly requesting updates through plan communications like the Summary Plan Description, and during the enrollment and exit processes. Ensure communications are clear, prominently state their purpose, and actively follow up on undeliverable mail, emails, or uncashed checks. Implement … Continued

Posted By Christopher J. Ciminera, CPA, QKA Throughout the COVID-19 pandemic, the Employee Benefits Security Administration (EBSA) had been relatively quiet on retirement plan compliance relief. That changed with Disaster Relief Notice 2020-01 issued on April 29, 2020. This notice provides guidance and relief for employee benefit plans due to the COVID-19 outbreak. Time Period … Continued

Posted by Christopher J. Ciminera, CPA, QKA On Tuesday, April 28 my blog, “How Do I Correct Late Salary Deferral Deposits?,” was posted. Coincidentally, the very next day the Employee Benefits Security Administration (EBSA) Disaster Relief Notice 2020-01 was posted. In this notice, the EBSA provides relief to plan sponsors regarding the possibility of lags in … Continued

Posted by Christopher J. Ciminera, CPA, QKA Update – April 29, 2020 On Wednesday, April 29, 2020 the Employee Benefits Security Administration (EBSA) also posted a Disaster Relief Notice 2020-01. In this notice, the EBSA provides relief to plan sponsors regarding the possibility of lags in deposits due to the recent COVID-19 issues which was … Continued