Art of the Qualified Plan Audit

In Summary Increasing Retirement Savings and Access: To expand coverage, new 401(k) and 403(b) plans must implement automatic enrollment and escalation starting in 2025. Additionally, the age for Required Minimum Distributions (RMDs) is raised to 73 in 2023 and 75 in 2033, and Roth accounts are exempt from RMDs while the participant is alive starting … Continued

Plan sponsors, third-party administrators, and other Form 5500 preparers take note! DOL representatives indicated that in some instances Part III – Accountant’s Opinion, Line 3(a) and 3(b) of the Schedule H is being filled out incorrectly. Marcus Aron (Division of Accounting Services) and Scott Albert (Division of Reporting Compliance) indicated at the 2023 Joint TE/GE … Continued

Posted By: Saaib T. Uppal, CPA, QKA IRS Announces Increases on Benefits and Contributions Dollar Limitations for 2023 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 2023: Plan Limits RETIREMENT & SOCIAL SECURITY 2023 Limit 2022 Limit 2021 Limit … Continued

In Summary Service Provider and Fiduciary Best Practices: Service providers should have a formal, documented cybersecurity program, conduct annual risk assessments, and secure a reliable third-party annual audit of security controls. Essential elements also include strong access controls, encrypting sensitive data, and maintaining an effective business resiliency program to address disaster recovery and incidents. Selecting … Continued

In Summary Expanded Self-Correction Possibilities: Eligibility for the Self-Correction Program (SCP) significantly increased, primarily by extending the time frame for correcting significant operational failures from two years to three years following the failure’s plan year. The ability to use a retroactive plan amendment to correct an operational failure was also broadened by removing the prior … Continued

Posted by Maria T. Hurd, CPA Yes, the Audit Extends to Excluded 403(b) Employees: Testing Compliance with Universal Availability It’s never a good sign when an employer sponsoring a 403(b) plan says: “You don’t need to see backup for employees who are excluded from the plan.” Ohh! But we do! Not often, but sometimes, clients … Continued

In Summary Financial Flexibility Offered to Qualified Individuals: The CARES Act permitted eligible participants affected by COVID-19 to take coronavirus-related distributions up to $100,000 from their retirement plans. Qualified individuals include those diagnosed, or those experiencing adverse financial consequences like being furloughed or unable to work due to lack of child care. Repayment is allowed … Continued

In Summary Exceptions Exist for Universal Availability: Limited exceptions permit the exclusion of certain employees from the 403(b) elective deferral opportunity, such as non-resident aliens, employees who normally work less than 20 hours per week, specific student employees, and those eligible for deferrals under certain other employer plans (401(k), governmental 457, or another 403(b)). Crucial … Continued

In Summary Administrative Improvements for Retirement Plans: Additional time is allowed for employers to adopt plans after a taxable year’s close, provided it’s before the extended tax return due date. The IRS and DOL were directed to permit certain groups of defined contribution plans to file a single aggregated annual return under specific conditions regarding … Continued

In Summary Reliance on External Parties Does Not Erase Fiduciary Responsibility: There is a misconception that service providers, like recordkeepers, are solely responsible for compliance. While these providers assist with administration, the plan sponsor retains the ultimate legal and fiduciary duty to ensure the plan operates within both the law and its own written terms, … Continued