Employee Benefit Plan Audits Archives

Plan Sponsor Alert: What to Know About Service Provider Consolidation

Written on March 2, 2023. Posted in Employee Benefit Plan Audits.

By Laura Zindel & Cindy Sandomenico Consolidation among service providers has been a long-developing trend. Empower, the nation’s second largest recordkeeper, has made headlines over the past few years with several large acquisitions including Personal Capital, Mass Mutual, and Prudential. Smaller deals are making headlines as well. Consolidation activity can affect retirement plans of all shapes and sizes. As clients of service providers that may be affected by consolidation...

Plan Sponsor Alert: Collective Investment Trust — What Plan Sponsors Need to Know

Written on March 1, 2023. Posted in Employee Benefit Plan Audits.

Collective investment trusts (CITs) comprise nearly half of all assets in target date funds and are on track to surpass mutual funds as the most popular investment in that strategy, according to independent research by Morningstar. Many plan sponsors are adding CITs to their lineup because CITs are touted to be less expensive and more flexible than mutual funds. While CITs may be a valuable tool to help participants achieve their retirement goals, plan sponsors should be mindful...

Plan Sponsor Alert: Department of Labor Unveils Regulatory Agenda for 2023

Written on February 27, 2023. Posted in Employee Benefit Plan Audits.

By Cindy Sandomenico & Laura Zindel SECURE 2.0 was signed into law on December 29, 2022, makes sweeping changes to retirement savings plans. Before plan sponsors can take advantage of the many provisions in SECURE 2.0, the DOL will need to provide additional regulations and guidance on some of the provisions. In other words, there is more to come on SECURE 2.0. In the meantime, the DOL is focused on 17 items recently released in its biannual regulatory agenda. Plan sponsors and...

Reinforcing U.S. Leadership and Competitiveness in Digital Assets

Written on January 24, 2023. Posted in Employee Benefit Plan Audits, General Business.

By Cindy Sandomenico & Laura Zindel Recent volatility in the digital assets market doesn’t appear to slow its growth. In fact, Fidelity recently found that nearly 90% of institutional investors find characteristics of digital assets appealing.[1] As investor interest continues to grow, retirement plan sponsors should pay close attention to developments in the digital assets industry, as plan sponsors may soon need to decide whether to add digital assets to their plan’s lineup. In...

Plan Sponsor Alert: Digital Assets’ Potential Benefits and Risks

Written on November 22, 2022. Posted in Employee Benefit Plan Audits.

By Laura Zindel and Cindy Sandomenico Digital assets such as cryptocurrencies and non-fungible tokens (NFTs) are growing and disrupting the way consumers and businesses pay, bank, and invest. A recent survey by Capitalize found that 60 percent of respondents would like a cryptocurrency investment option in their 401(k) plans. Several service providers, including Fidelity, have responded to that request by offering 401(k) participants direct but limited cryptocurrency investment options....

Remittance Schedules: How to Know and Meet Your Deadlines

Written on July 26, 2022. Posted in Employee Benefit Plan Audits.

Part of offering a defined contribution plan, whether a 401(k) or a 403(b) plan, is making sure that the money participants contribute from their paycheck is deposited in their retirement account in a timely manner. While this might seem like a relatively minor and simple task in the scope of a plan sponsor’s fiduciary duties, the Department of Labor (DOL) views non-compliance with remittance rules as a major issue, and missing deadlines for deposits—even by a couple of days—can...

Why Plan Sponsors Should Read Their Service Providers’ SOC Reports

Written on July 13, 2022. Posted in Employee Benefit Plan Audits.

Written by Cindy Sandomenico and Laura Zindel. WHY PLAN SPONSORS SHOULD READ THEIR SERVICE PROVIDERS’ SOC REPORTS When a plan sponsor hires a service provider, that organization and its professionals become part of the team operating the client’s retirement plan. Each member of the team is expected to perform a specific task according to what is prescribed in the plan document. But how do you know whether each service provider has effective systems and controls in place to ensure...

Abandoned 401(K) Accounts and the Great Resignation

Written on February 22, 2022. Posted in Employee Benefit Plan Audits.

By Cindy Sandomenico, CPA and Laura K. Zindel, CPA The trend of U.S. workers leaving their jobs and employers struggling with high levels of employee turnover continues to gain momentum. Another 4.5 million U.S. workers quit their jobs in November alone, according to data from the U.S. Bureau of Labor Statistics. Meanwhile, the number of job openings in the United States remains elevated at 10.6 million, as companies across sectors and industries continue to have a hard time recruiting...

SAS 136: What Plan Sponsors Need to Know About Upcoming Changes to ERISA Plan Audits

Written on February 16, 2022. Posted in Employee Benefit Plan Audits.

By Laura K. Zindel, CPA and Cindy Sandomenico, CPA Employee benefit plan sponsors and their auditing firms need to begin preparing for the adoption of Statement on Auditing Standards No. 136 (SAS 136), Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA (Employee Retirement Income Security Act of 1974). This auditing standard was enacted by the American Institute of Certified Public Accountants (AICPA), and was originally effective...

ERISA Update and Outlook for 2022

Written on February 3, 2022. Posted in Employee Benefit Plan Audits.

By Cindy Sandomenico, CPA and Laura K. Zindel, CPA Employers have spent the last two years dealing with many challenges and disruptions, and they are now looking to move forward in 2022 against a backdrop of economic and pandemic-related uncertainty and market volatility. Here are four themes that plan sponsors should be keeping a close eye on in 2022. The #1 Financial Story of the Year: Inflation You can’t go anywhere without hearing about inflation—and for a good reason. The...

Retirement Plan Limits Announced for 2022

Written on December 23, 2021. Posted in Employee Benefit Plan Audits, Retirement.

The Internal Revenue Service (“IRS”) announced the retirement plan contribution limits, adjusted for cost-of-living adjustments, for 2022. These adjustments can be found in greater detail in IRS Notice 2021-61 at https://www.irs.gov/pub/irs-drop/n-21-61.pdf. Following is a chart summarizing some of these adjustments: 401k Plan Limits20222021 401k Elective Deferrals2050019500 Annual Defined Contribution Limit6100058000 Annual Compensation Limit305000290000 Catch-Up...

What You Should Know About ERISA Plan Audit Changes

Written on April 7, 2021. Posted in Assurance, Employee Benefit Plan Audits, General Business.

By Craig Erickson, Partner-in-Charge, Employee Benefit Plan Group In July 2019, the American Institute of Certified Public Accountants (AICPA) issued a new Statement on Auditing Standards (SAS 136) designed to regulate and improve the audit quality for plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). The new standards were originally intended to apply to audits of financial statements for periods ending on or after December 15, 2020, but the...

Retirement Plan Limits Announced for 2021

Written on November 9, 2020. Posted in Employee Benefit Plan Audits.

The Internal Revenue Service (“IRS”) announced on October 26, 2020, the retirement plan contribution limits, adjusted for cost-of-living adjustments, for 2021. These adjustments can be found in greater detail in IRS Notice 2020-79. The COVID-19 pandemic’s continuing impact on the U.S. economy contributed to relatively flat changes in the 2021 COLA amounts as U.S. economic deflation during the first half of 2020 impacted the COLA metrics. The IRS increased the IRS annual compensation...

401(k) Plans and the Coronavirus

Written on March 25, 2020. Posted in Employee Benefit Plan Audits.

By Craig Erickson With the global pandemic caused by COVID-19 causing vast uncertainties in the economy, employers that sponsor employee benefit plans and the plan fiduciaries must continue to manage and administer their benefit plans, as well as address inquiries from their participants. The following are some topics that may be helpful during these times. Hardship Withdrawals Plan sponsors may receive calls from plan participants in the near future asking for ways they can financially...

Coronavirus Retirement Plan Review

Written on March 25, 2020. Posted in Employee Benefit Plan Audits.

By Craig Erickson With the continual uncertainty we are facing each day, it is important to keep in mind that changes in legislation may impact your current design of your employee benefit plan. Following are some topics Plan sponsors and fiduciaries of employee benefit plans may overlook. 401(k) and Profit-Sharing Plans: Employer Contributions – Plan sponsors and fiduciaries may want to consider reducing or halting employer contributions. For non-safe harbor plans (match or non-elective...

2019 Maximum Limitations for Retirement Plans

Written on December 11, 2018. Posted in Employee Benefit Plan Audits.

The IRS has announced that the amounts employees can contribute to retirement plans will increase in 2019. Following is a table detailing some of those increases: – Source – Notice 2018-83 (https://www.irs.gov/pub/irs-drop/n-18-83.pdf) Provided by Wiss’ Employee Benefit Plan Group Craig R. Erickson – Partner Cindy Sandomenico – Director Laura Zindel – Manager Craig Erickson is the Partner-in-Charge of our Employee Benefit Plan Group where...

Update to Fiduciary Rule Improves Retirement Advice

Written on April 18, 2017. Posted in Employee Benefit Plan Audits.

By Wiss Associate You may assume that when a broker, advisor, insurance agent, or consultant makes recommendations about your retirement account, the advice is in your best interest. But that hasn’t always been the case. While the majority of advisers act in the best interest of their clients, not all have been legally required to do so, and some have been swayed by hidden fees or commissions to recommend investments that weren’t necessarily the best choice for their clients’ individual...

Borrowing from Your 401(k): What to Know Before Making the Decision

Written on March 21, 2017. Posted in Employee Benefit Plan Audits.

By Cindy Sandomenico Borrowing money from your 401(k) account can be tempting. You know the money is there, and it’s yours, so why not use it? Before you pull the trigger, however, consider the limitations and consequences. Here are some important points to keep in mind. Know the rules Generally, you can borrow from a 401(k) for any reason, such as paying educational expenses or buying a home for the first time — although employers are not required to offer a loan option within...

How to Minimize Your Fiduciary Liability

Written on February 14, 2017. Posted in Employee Benefit Plan Audits.

By Craig Erickson Updated 7/30/2019. Those with discretionary authority or administrative control over their organization’s retirement and 401(k) plan face significant risks. If fiduciaries make decisions that negatively affect plan participants or beneficiaries, they can be held personally liable for breaching their fiduciary duties, even if the action was unintentional. Although fiduciaries cannot entirely eliminate the risks associated with their role, there are several things...

What the DOL Looks for During an Audit

Written on January 24, 2017. Posted in Employee Benefit Plan Audits.

By Craig Erickson You’ve just learned that the Department of Labor’s Employee Benefit Security Administration has selected your company’s retirement plan for an investigation. Are you and your plan prepared for an audit? The DOL typically doesn’t provide much notice before beginning an audit, which can last several days, weeks or longer. However, in advance of starting, you will receive an investigation notice that includes a list of documents its people will want to review when...

What Type of 401(k) Plan Document Do I Have and When Do I Need to Update it?

Written on December 20, 2016. Posted in Employee Benefit Plan Audits.

By Craig Erickson When you establish your company’s 401(k) plan, you have to make a range of decisions, from the type of plan and investment tools you’ll offer to participation requirements and guidelines. Once you’ve done this, you need to put it in writing. This is your plan document, a mandatory part of your plan that details its provisions and clearly communicates them to participants. There are three levels of plan documents: Prototype. This off-the-shelf version of a plan...

When 401(k) Loans are Considered to be in Default

Written on November 8, 2016. Posted in Employee Benefit Plan Audits.

By Laura Zindel Taking out a 401(k) loan can seem like a relatively simple way to borrow money. It is a very common practice, but many employees who borrow from their plans aren’t prepared for the financial consequences of doing so if a loan ends up in default. The most common reason for defaulting on a 401(k) loan is the loss of a job. If the employee loses his or her job, the plan document rule requires that any outstanding loan balance must be repaid within a certain timeframe,...

How IRS Revenue Protocol 2016-37 Will Impact Retirement Plans

Written on October 18, 2016. Posted in Employee Benefit Plan Audits.

By Cindy Sandomenico Approved in June 2016, IRS Revenue Protocol 2016-37 alters the way individually designed retirement plans must file amendments and submit determination letters to the IRS. This will be effective Jan. 1, 2017. Previously, retirement plans were subject to a five-year cycle involving remedial and formal adoption of amendments, and submission of determination letters every five years, regardless of whether the plan was amended. This process was time-consuming for...

How Proposed Changes to Form 5500 Could Impact Your Filing Requirements

Written on September 27, 2016. Posted in Employee Benefit Plan Audits.

By Wiss Associate If your company has an employee benefit plan, you should be familiar with IRS Form 5500, the form you use to report activity regarding your retirement and welfare plans. On July 11, 2016, the U.S. Department of Labor (DOL) proposed revisions to Form 5500 and the related schedules in an effort to promote more thorough monitoring of plans by employers, fiduciairies, participants and, of course, the DOL. Here are some of the changes and how they could significantly...

How to Reduce Risk Using Fidelity Bonds and Fiduciary Liability Coverage

Written on October 13, 2015. Posted in Employee Benefit Plan Audits.

By Craig Erickson Managing an organization’s employee benefit and retirement plan comes with risks, and potential missteps can affect both the plan administrator and participants. To protect you from those risks, insurance companies offer fiduciary bond — often called fidelity bond — and fiduciary liability coverage. And while the two terms sound similar, there are distinct differences. Assets and administrators at risk The plan administrator can act, or fail to act, in ways that...

What’s your Responsibility to Find Missing 401(k) Plan Participants?

Written on September 22, 2015. Posted in Employee Benefit Plan Audits.

By Craig Erickson As the fiduciary of a 401(k) plan, you are responsible for retirement plan participants, even if they’ve left your company with no forwarding addresses or you have contact information that’s no longer valid. If employees work at your company long enough to take part in your 401(k) plan, and then disappear, moving from state to state, taking a series of jobs, how responsible are you for tracking them down? When a participant cannot be located via routine delivery...

What to Look for When Hiring a 401(k) Plan Auditor

Written on August 27, 2015. Posted in Employee Benefit Plan Audits.

By Craig Erickson As the number of participants in your company’s 401(k) plan grows, at some point the plan will require an audit. Also known as an employee benefit plan (EBP) audit, the U.S. Department of Labor generally requires one when the number of participants in your employee benefit plan reaches 100, though there are some exceptions. This audit, a result of the Employee Retirement Income Security Act of 1974, assesses whether an employer’s plan has the liquidity to meet...