Do You Need a Retirement Plan Audit?

Jake Kriegler

Is it time for an employee benefit plan audit?  As your company continues to grow, the number of participants in your retirement plan will likely grow as well. This can often trigger the need for an audit of your retirement plan. If your plan is approaching 120 participants, it’s time to start thinking about the retirement plan audit process.  The following are the FAQ’s surrounding audit requirements:

What number of participants trigger a “Large Plan” audit?

Per DOL regulations, a Plan that has over 120 eligible and active participants at the beginning of the plan year must file a “Large” Plan IRS Form 5500 which includes an audit of the Plan financial statements.   The participant count includes 1) actively participating employee, 2) retired, deceased or terminated employees that still have assets in the Plan and 3) all eligible employees who have not yet enrolled or elected to enter the Plan.

Can I avoid filing as a “Large Plan”?

In certain cases, if you a proactive, you may be able to distribute, per the Plan provisions, the funds of certain individuals to lower the number of participants and stave off the need for the “Large” Plan filing and an audit of the Plan financials.  This may work for a few years, but if your Company is continuing to grow, the “Large” Plan filing may be inevitable.

What should I look for in my plan auditor?

Of all CPA audits, retirement plan audits hold the most potential for severe penalties assessable to plan fiduciaries or plan sponsors. As a result, selecting a qualified, independent auditor is of extreme importance to the plan administrator. A quality audit helps ensure the financial integrity of a plan and acts to protect plan participants and fiduciaries.  Look for a firm that:

  • Is experienced and specialized in 401k, 403b and ESOP plan audits
  • Is experienced in working with 3rd party administrators, asset custodians and trustees
  • Is experienced in working with different investment managers
  • Provides a stable audit staff from year to year
  • Provides suggestions for employee participation and operational improvements
  • Can offer price efficiency due to specialization and experience
  • Can minimize the audit impact on your staff
  • Is a member of the Employee Benefit Audit Quality Center
  • Has knowledge of the new fiduciary rules being implemented in 2017
  • Can help ensure you are in compliance with regulations and Plan provisions to help avoid penalties from the Department of Labor or the IRS

Here at Boyum Barenscheer we strive to be “advisors, not just auditors”.  Please contact Jake Kriegler, CPA at 952-854-4244 or for a FREE audit requirement consultation and a cost estimate for your plan if an audit is needed.  Or visit our employee benefit plan audit services page.


Benefit Plans: Your Responsibility - As Important as Your Employer's


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