Art of the Qualified Plan Audit

Administrative simplicity or empathy for participants in need? Allowing more than one participant loan in a retirement plan is not a black and white determination.

As mentioned in my previous blog, EPCRS: How to Correct Improper Exclusions of Employees from a 401(k) Plan, the IRS implemented and recently revised the Employer Plan Compliance Resolution System (EPCRS),

Keeping two sets of books often means that someone is hiding something from the taxing authorities.

Pre-tax contributions to a 401(k) or 403(b) plan are not taxed when made to the plan but are taxed when the participant receives a distribution of the contributions.

When it comes to IRS audits, “an ounce of prevention is worth a pound of cure,” as Benjamin Franklin so wisely put it.

There is a popular philosophical question that asks if a tree falls in a forest, and no one is around to hear it, does it make a sound?

As a plan sponsor, you may know that, generally, if your plan covers 100 employees or more, your plan is considered a large plan and requires audited financial statements to be attached to the 5500 filing.

As auditors, we are required to review the controls in place at a plan sponsor of a retirement plan and its service providers to assess the risk of material misstatement resulting from control risk. In doing so, we constantly evaluate the adequacy of the control structure and recommend improvements to strengthen the processes to prevent errors.

Discrimination. It’s a concept that most people don’t associate with retirement plan savings.

The use of the wrong definition of compensation is the most common error found in employee benefit plan audits, and it can be a very costly mistake to correct in accordance with the provisions of the IRS’ Employee Plan Compliance Resolution System (EPCRS).