Art of the Qualified Plan Audit

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

Posted By Chris Ciminera, CPA, QKA I am sure it feels like a cruel game of hide-and-seek for plan sponsors that are unable to find a participant or beneficiary to pay retirement benefits that are due. The administrative procedure seems cut and dry; however, an issue arises when there is old contact information, or the … Continued

Posted By: Maria T. Hurd, CPA, RPA What if the Participant Already Spent the Overpayment from the Plan?     Ineligible or excess distributions from qualified plans happen all the time. In our last 30 years of auditing retirement plans, our distribution tests have uncovered all the following ineligible or excess distributions:   Hardship reason … Continued

Posted By: Maria T. Hurd, CPA Taking a hardship distribution should not be, in itself, a hardship to a participant going through challenging times, nor should it be an administration hardship to the employer trying to help. Although obtaining documentation to substantiate a hardship is not, in itself, difficult, missing hardship backup is one of … Continued

Posted By Maria Hurd, CPA The SECURE Act increased IRS Late Filing Penalties for Form 5500 by how much? How can I avoid them? IRS Penalties Tenfold. That’s how much the SECURE Act (the “Act”) increased the penalty for the late filing of a Form 5500 –TENFOLD! Before the Act, the IRS could assess a … Continued

Posted by Maria T. Hurd, CPA Distributing a Safe Harbor Match Plan Notice Slipped Through the Cracks. What is the Correction? The barrage of changes introduced by the SECURE Act, closely followed by the CARES Act, along with furloughs, remote work, and all the work-life changes of pandemic year 2020 may have resulted in administrative … Continued

Posted by Maria T Hurd, CPA Updated November 11, 2020 The CARES Act gave us a Required Minimum Distribution (RMD) holiday during 2020, but the SECURE Act’s new RMD rules will be back in 2021. How will the changing rules affect financial statement audits? RMDs under the SECURE ACT The SECURE Act (Setting Every Community … Continued

Posted by Saaib T. Uppal, CPA, QKA The IRS has announced cost-of-living adjustments that should be noted for retirement planning purposes. Below is a chart that outlines employee benefit plan limits for 2021: PLAN LIMITS RETIREMENT & SOCIAL SECURITY 2021 Limit 2020 Limit 2019 Limit Section 401(k), 403(b), 457(b) elective deferrals  $19,500  $19,500  $19,000 401(k) … Continued

Posted by Maria T. Hurd, CPA 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 errors can be corrected through the IRS Employee Plan Compliance Resolution … Continued

Posted By Maria T. Hurd, CPA Contrary to popular belief, company owners and highly compensated employees (HCEs) are not guaranteed the opportunity to contribute the maximum 401(k) contribution limit to their company’s retirement plan, even if the 401(k) deferral contributions represent their own money. That is because 401(k) plans are subject to nondiscrimination tests to … Continued