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Employee Benefit Plan Audits

Benefit:

  • Meets Department of Labor and Internal Revenue Service regulatory requirements under ERISA
  • Provides assurance that retirement plan is handling employee contributions, enrollments, distributions and loans in compliance with plan guidelines and employees' instructions.

Who's most likely to benefit:

  • Organizations whose retirement plan meets the threshold number of plan participants to require an audit

Description:

Increasing Department of Labor emphasis on enforcement has led to more DOL audits for all organizations, which can result in significant penalties for noncompliance. Sponsors of plans of a certain size are required to have their plan audited annually by a CPA firm or risk disqualification of the plan and its tax-exempt status. However, the DOL has also increased its emphasis on the quality of the CPA firm conducting the employee benefit plan audit.

A 2015 DOL study of employee benefit plan audit quality found a link between audit plan quality and several factors: number of employee benefit plans audited annually, training specific to employee benefit plan audits, and firm membership in the AICPA’s Employee Benefit Plan Audit Quality Center (AICPA EBPAQC).

AGH’s commitment to its employee benefit plan audit practice is reflected in the firm’s membership in the AICPA EBPAQC, training specialized to these types of audits, and a sizable employee benefit plan audit practice larger than more than 90% of CPA firms in the DOL’s 2015 survey.

This commitment to plan audit quality results in peace of mind for plan sponsors increasingly likely to undergo a DOL audit. Some estimates project that every plan sponsor will undergo a DOL audit within the next three years.

AGH’s employee benefit plan audit practice is supplemented by the expertise of AGH’s sizable retirement plan recordkeeping practice. If questions related to DOL and ERISA regulations arise, our recordkeeping group is literally “down the hall” from our audit team.

In an employee benefit plan audit, an AGH audit team samples and tests various transactions within the retirement plan’s year, including comparing requested versus actual participant elections, loans outstanding, plan distributions and appropriate exclusion from the plan. AGH’s audit report is issued to be included as part of the organization’s Form 5500 Filing with the Department of Labor.