Art of the Qualified Plan Audit

In Summary SECURE Act Changes to RMD Age: The new rules from the SECURE Act raise the age for Required Minimum Distributions (RMDs) from 70½ to 72. Terminated non-5% owners must take their first RMD by April 1 of the year following the later of turning 72 or retiring. Five percent owners must begin RMDs … 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

In Summary Plan Error Correction Methods in EPCRS: Operational errors in retirement plans can be fixed through the IRS Employee Plans Compliance Resolution System (EPCRS) using the Self-Correction Program (SCP) for certain timely-corrected and insignificant errors, the Voluntary Compliance Program (VCP) with an IRS fee and submission for significant or specific errors, or the Audit … Continued

In Summary Nondiscrimination Tests Limit HCE Contributions: Company owners and highly compensated employees (HCEs) may not contribute the maximum 401(k) limit because of nondiscrimination tests like the ADP and ACP tests. These tests ensure that HCE contributions are not disproportionate and are limited based on the average deferral and match percentages of non-highly compensated employees … Continued

Posted By Stacey Snyder, CPA, QKA, TGPC If you’re preparing for your first 401(k) plan audit, you may be wondering what information the auditor will need for the audit. In order to help you prepare, we have created a template of an audit information request which conveys the overall level of detailed verification required in … Continued

In Summary New Comparability Plan Design Is a Technique: Cross-testing is used in new comparability profit-sharing plans to legally maximize retirement savings contributions for owners and highly compensated employees (HCEs). This is achieved by comparing the Equivalent Benefit Accrual Rate (EBAR) at retirement age, rather than the current contribution rate, as the testing mechanism. EBAR … Continued

Posted By Maria T. Hurd, CPA, RPA Our first blog about the CARES Act titled Unsaving for Retirement in Pandemic Times discussed the original definition of a Qualifying Individual eligible to take the additional Coronavirus-related loans and distributions. The original definition of a qualified individual applied if the participant in the plan experienced a financial … Continued

Posted By: Stacey Snyder, CPA, QKA, TGPC If you’ve just been informed that your 401(k) plan needs an audit, you probably have many questions if you have never been through a 401(k) audit. Hopefully by answering the five Ws (Who? What? When? Where? Why?), we’ll cover most of your questions. WHO? – Who Audits a … Continued

Posted by Maria T. Hurd, CPA, RPA For 403(b) plan eligibility determinations, the IRS says that “Once In, Always In” is much better than “In and Out,” so are your part-time employees “In or Out” or “In and Out”? Part-time workers and transient workers have always posed a challenge for plan sponsors trying to determine … Continued

Posted by Tyler Starr, CPA The American Institute of Certified Public Accountants’ (AICPA) Auditing Standards Board (ASB) issued the Statement on Standards for Attestation Engagements (SSAE) No. 19, Agreed-Upon Procedures Engagements, in December 2019. SSAE 19 supersedes SSAE 18 AT-C section 215 of the same name and also amends certain provisions of SSAE 18 section … Continued