From WebCPA.com , “The Internal Revenue Service has begun mailing out questionnaires to 401(k) plan sponsors to assess compliance with retirement plan regulations.
“The IRS is contacting a random sample of 1,200 401(k) plan sponsors that filed a Form 5500 for the 2007 plan year. Plan sponsors who receive a letter will complete the Questionnaire by accessing a special Web site.”
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A recent article from Employee Benefit Audit News asks the question – if you could do your employee benefit plan all over again, what should you think about? With our current economy, plan sponsors need to think about their benefit plans as if they were starting over – is a 401(k) plan the best retirement plan for employees? What are your goals for the plan? Will you as the sponsor continue matching contributions?
Read the full article here.
Over the next few months, we’d like to introduce you to members of our Employee Benefit Audit team. This month, meet Lee Mitchell, a Senior Associate at PBTK who has been with the firm since 2007. He works primarily on 401(k) audits, but he also does public (SEC) and private company auditing and internal control design.
When you first visit with Lee, ask him about his love for the outdoors which includes mountain biking, fishing, camping, hiking and golf.
Hopefully, your plan administrator has already informed you that 2009 Form 5500s must be filed electronically under the computerized ERISA Filing Acceptance System (EFAST2). For more information, please contact your plan administrator and/or see the EFAST2 website at http://www.efast.dol.gov. The EFAST2 system requires registration of those who will be electronically signing the Form 5500 either as “Employer/Plan Sponsor” and/or “Plan Administrator.” The audited financial statements will be submitted electronically with the Form 5500 in a PDF format.
Since it is new this year, the electronic filing system may require some additional time – now is the time to start working with an audit firm on the audit procedures, gathering information, and authorizing the auditor to proceed.
PBTK would like the chance to discuss our capabilities and the ease of transitioning your audit to a new firm over a brief phone call. Over the next few weeks, look for additional materials on our employee benefit audit team. If you would like to contact me directly, please call 702-384-1120 or email me at email@example.com.
If your retirement plan has 100 or more participants, you are typically required to have a plan audit every year. With the audit deadline looming in the near future, by now your CPA should have sent you a request list outlining the important documents and reports they will need to complete the audit.
The following list is the one that Piercy Bowler Taylor & Kern CPAs has sent out to our clients. While there will be other reports and documents gathered during field work, preparing this list of items in advance will help streamline the audit process and help you meet any and all deadlines. Please contact Kelly Parker at firstname.lastname@example.org for a complete request list of all items needed during the audit process.
ITEMS NEEDED ASAP
|Audit package from your custodian and/or administrator containing, but not limited to: (Communicate the items listed below with your service providers)
- Annual participant activity including beginning balance, employee & employer contributions, earnings, loans, any other activity, and ending balance. (This activity must be by participant and include grand totals. A special request to your service provider may be needed to obtain the report in this format.)
- Copy of the Form 5500. Instruct your provider to mark Schedule H, Part III, Line A as “Disclaimer”. Also ask them to enter Piercy Bowler Taylor & Kern, EIN# 88-0265237 on Line d.
- Copy of the non-discrimination test reports and supporting attachments for 2009.
- Custodian prepared financial statements as of 12/31/09.
- Financial summary and activity for the plan year ended 12/31/09.
- SAS 70 Report as of 12/31/09. (This may be available online. If so, PBTK will download the report.)
- Certificate as to the completeness and accuracy of the information provided by the custodian.
As a plan sponsor, you might consider sharing this recent article from AP reporter David Pitt on the inheritance rules and regulations associated with plan beneficiaries with the investors in your plan. All the worrying in the world about the money in the 401(k) plan won’t do any good if investors don’t take the proper steps regarding tax planning and distributions of the account.
401(k) beneficiary rules: What you must know
By David Pitt, Associated Press
Most 401(k) investors are worried about whether they’ll outlive their savings and haven’t given much thought to the opposite scenario.
This can be a big mistake because there are inheritance rules that may require your account to be distributed in a way that you didn’t foresee.
So for starters, confirm who is listed as the beneficiary of your account. You should have filled out a beneficiary form when you opened the account, but it’s a good idea to reevaluate it periodically. It’s especially important if you’re recently divorced or experienced other life changes that would prompt you to rethink your choices.
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