Art of the Qualified Plan Audit

In Summary The 80-120 Rule for Audit Requirement: A retirement plan’s need for an annual audit is determined by counting participants with account balances on the first day of the plan year. The “80-120 rule” is an exception that allows a plan with 80 to 120 participants to file as a small plan (no audit) … Continued

In Summary Foundational Plan Governance: Auditors will require all core legal and governance materials, such as the executed plan document, the most recent IRS determination letter, committee minutes, proof of the ERISA fidelity bond, and copies of all service provider agreements. Financial Reporting: The audit relies on detailed financial data, including the draft Form 5500, year-end … Continued

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