Companies that provide retirement benefits to at least 100 employees must conduct an annual audit of their plan. The complexity of the regulations and the requirements can be so overwhelming. The Employee Benefits Security Administration recently performed a study to assess the quality of employee benefit plan audits. They determined that 39% of audits conducted contain major deficiencies.
Whether your employee benefit plan is being audited for the first time or you’re already familiar with the process, the most critical first step is finding an auditor. Look for a CPA firm that can ensure proper compliance and verify your company’s fiduciary responsibilities. Once you’ve found the right partner, here are five tips to make the process easier and more efficient.
- Familiarize yourself with the provisions of your plan.
- Meet with auditors and internal plan administrators to discuss goals, expectations, regulatory changes, and a timeline for delivery.
- Gather the documents the auditors will need to examine. Typically, they look at:
- A summary of the plan’s activity
- Employer and employee contributions
- Investment results
- Payroll records
- Distribution of benefits
- Participant loans
- Payment of expenses
- Proof of the plan’s ERISA fiduciary bond coverage
- Form 5500 from previous years
- Internal communications that pertain to the plan
- Other significant agreements or correspondence related to the plan
- Select someone to be the point person on all audit related information to ensure everything is collected prior to the auditors’ scheduled arrival date.
- Once the audit begins, maintain constant communication with the auditors regarding any open items.
Planning is a vital component of an audit, especially for employee benefit plans. A trusted financial advisor is also important. At Boris Benic and Associates, we believe that fostering a positive relationship is key to a successful employee benefits audit. Download our statement of qualifications now, and give us a call to get started.