Art of the Qualified Plan Audit

Plans that obtain a valid limited scope certification for the completeness and accuracy of investment information from a regulated financial institution such as a bank, trust company, or insurance company, can instruct their auditors to exclude investment information from the scope of their audit.

Many nonprofits who sponsor ERISA 403(b) plans are not aware that they need an audit, because counting participants involves much more than knowing how many full-time employees the organization has or how many account balances are in the plan.

As discussed in one of our previous blog posts How to stop a non-elective contribution, circumstances and factors often arise that have us wishing that a commitment that we had entered into had an escape clause.

WEBINAR TODAY March 31, 2014: Join Legg Mason for a webinar with Maria T. Hurd, CPA, Director of Retirement Plan Audit Services at Belfint, Lyons & Shuman. Maria will offer insights to help plan sponsors and advisors prepare for a plan audit.

Imagine you come home from school after graduation and you see your mother beaming with a huge smile on her face. She asks to see your diploma (a certificate of completion in this example) and you oblige and move on to show your father the same.

Financial advisors on TV and financial publications in reputable papers and magazines consistently encourage people who participate in an employer-sponsored retirement plan to contribute as much as possible. In many cases…

Despite the relief retirement payroll managers and retirement plan officials may feel from this most recent sprint to the finish, THE RACE IS NOT OVER. Get that second wind and verify that deferral withholdings that employees have trusted you to put in their retirement accounts were actually deposited to the plan, without exception.

As explained in Timeliness of Deposits, the Department of Labor (DOL) has set deadlines for which salary deferrals must be deposited into the plan. If these deadlines are not met, a prohibited transaction under Section 4975 will have occurred and Form 5330 must be filed and excise taxes paid for each year or part of the year that the prohibited transaction is outstanding.

In a time when nonprofit organizations are facing higher demand for their services with fewer financial resources available to them, maintaining compliance with the ever-changing landscape of regulatory requirements is becoming increasingly difficult.

Plan sponsors who are signatories to collective bargaining agreements agree to make contributions to their employees’ unions’ benefit funds, which generally include a welfare plan, a defined benefit pension plan, and a defined contribution annuity fund, among others.