If your company is growing, the rules governing the way you do business may require changes. For example, typically, any company with more than 100 eligible employee-benefit plan participants, at the beginning of the plan year, is required under federal law to submit audited financial statements for their employee-benefit plan with the filing of their Form 5500 annually. There are exceptions to this rule, therefore it’s important to consult with your employee benefits advisor regarding your specific plan.
This audit requirement allows the Department of Labor to monitor whether employee-benefit plans are being operated in accordance with government standards and are following the provisions outlined in their respective plan documents. These audit rules apply to such employee-benefit plans as 401(k), 403(b), pension, profit-sharing and health and welfare benefits plans.
Penalties can be steep. That means companies would be wise to pay attention to both the July 31 deadline and the extension deadline of Oct. 15 for calendar year end plans.
So how do you tackle an employee benefit plan audit? Here are some planning tips that will make the process easier and more efficient:
Don’t face this process alone. Consult with an advisor to assure you are in compliance.
About the Author
Linda McLean is a Principal in the Commercial Business group and leads the firm’s Employee Benefit Plan service team. She is an expert at spotting and resolving areas of noncompliance. She helps clients implement best practices and strengthen their internal controls around the administration and compliance of their employee benefit plans. Her extensive experience includes different types of plans, including 401(k), 403(b), ESOP and defined benefit plans. Linda can be reached at 781-937-5322 or firstname.lastname@example.org.