Art of the Qualified Plan Audit

Pre-tax contributions to a 401(k) or 403(b) plan are not taxed when made to the plan but are taxed when the participant receives a distribution of the contributions.

When it comes to IRS audits, “an ounce of prevention is worth a pound of cure,” as Benjamin Franklin so wisely put it.

In the retirement plan industry, 2 + 2 can be 4, or many other amounts depending on the actuarial assumptions used. Similarly, one-participant plans can actually cover hundreds of participants.

Posted by Maria T. Hurd, CPA Disclaimer: All blog posts are valid as of the date published. In a highly regulated industry with complicated rules that always have exceptions (except when the exception does not apply) it is inevitable that sooner or later a failure to follow the plan document will take place. Such operational … Continued

One of the most common operational errors when administering retirement plans is the failure to implement a participant’s elective deferral election or change in percentage.

Prospective clients often want to see a sample information request letter to get a better idea of how an audit will progress. In response to that frequently asked question, we created a white paper to assist clients in preparing for their retirement plan audits.

In retirement plan administration, it is sometimes necessary to use prior year data to make certain determinations.

Most plan sponsors know that their retirement plans are subject to discrimination tests, generally designed to prevent highly compensated employees (HCEs) from obtaining a benefit that is disproportionately favorable when compared to the benefits of the non-highly compensated employees (NHCEs).

It may be counter-intuitive, but reducing the number of employees who are eligible to participate in a retirement plan could be the greater good in certain situations.

Every year, at least one retirement plan service provider tells us that a plan qualifies for a limited scope audit because their company has an SOC 1 report.