Each Monday 401kBasics posts a new tip as a part of our series “Plan Sponsor Quick Tips”. This series is designed to assist plan sponsors in filling their fiduciary role and running their retirement plan efficiently. Your feedback or suggestions on future articles is welcome.
July 31st is approaching fast for retirement plans that follow the calendar year and this means time for filing your Form 5500. Federal law requires that plans with 100 or more participants have an audit before they file their annual return. Below are some criteria that should assist you, the plan administrator, in selecting an auditor for your plan:
- Choice of Auditor: Experienced and reliable to ensure a complete audit and reduce any repercussions.
- Credentials: Licensed or certified by a State regulatory authority.
- References: You may wish to check with the appropriate state regulatory authority on validity of credentials.
A good auditor will prepare an engagement letter detailing the scope (timing and fees) of the audit before it begins. Many plans use this time t o revisit how they have maintained their plan documents and files, as these will be requested at the time of the audit. It is important to discuss the audit with your legal counsel to determine if limiting it is suitable for your plan. Good luck this year and remember to ask your service provider any questions you may have with regard to your audit. You can also get more information from the DOL by clicking on this link.
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