Category: Benefit Plans
The Basics of New Comparability Plans
November 14, 2024
New comparability plans are qualified defined contribution plans that allow an employer to allocate different profit-sharing contribution percentages to different groups of employees at the employer’s discretion. These plans are subject to complicated discrimination tests that take into account the equivalent benefit at retirement of the current contribution allocated to each participant. Specifically, new comparability … Continued
The LTPT Rules and 403(b) Plans
August 06, 2024
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
Form 5500 Participant Count: Cash or Accrual Basis? To Audit or Not to Audit?
June 25, 2024
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
Disclaimer of Opinion Removal Analysis
June 05, 2024
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
Unwritten Rules That MUST Be Followed
May 16, 2024
Don’t Stand, Don’t Stand So, Don’t Stand So Close to Me Unlike unwritten rules referring to the social norms, customs, and expectations that guide behavior in various contexts, such as maximizing personal space in an elevator, or bringing a small gift when invited to someone’s house, SECURE 2.0 brings rules that must be followed effective … Continued
Counting Participants in a First Year Plan
March 25, 2024
The 2023 Form 5500 Annual Return/Report of Employee Benefit Plan includes some changes to previous filing requirements as published in the Federal Register ) and documented in the 2023 Form 5500 instructions. As discussed in our previous blogs “Learning How to Count Again” and “Counting What Counts, Counts the Auditors Out!,” one change was to … Continued
The Maximum Contribution May Be Lower Than You Thought: ADP and ACP Test Basics for 401(k) and 403(b) Plans
February 01, 2024
But It’s My Money! Business owners and Highly Compensated Employees (HCEs) are often shocked to hear that they cannot contribute the maximum 401(k) or 403(b) deferral ($23,000 and $22,500 for 2024 and 2023, respectively) because their plan did not pass the discrimination tests. Much to their surprise, through the Actual Deferral Percentage (ADP) and the … Continued
What are the Reporting Requirements for a Pooled Employer Plan?
November 14, 2023
In our previous blog post, Pooled Employer Plans (PEPs): The Basics, we outlined the basics of a PEP and will not dig into the details of the financial reporting requirements for these plans. The administrator of a PEP must file an annual Form 5500, Annual Returns/Reports of Employee Benefit Plan, to which the PEP administrator … Continued
What Information Do You Need for Our 401(k) Audit?
September 27, 2023
Nervous apprehension tends to overwhelm new 401(k) audit clients who don’t know how involved they will need to be in the document production for the audit. Often, they are hopeful that one or more of their service providers will “take care of everything” as they promised. The bottom line is that the extent of the … Continued
Statement on Auditing Standards (SAS) 136
July 20, 2023
Statement on Auditing Standards (SAS) 136 addresses the auditor’s responsibility to form an opinion on the financial statements of employee benefit plans (EBPs) subject to the Employee Retirement Income Security Act of 1974 (ERISA). It also addresses the form and content of the auditor’s report issued as a result of a full scope or an … Continued