This recent article from Employee Benefit News sheds some light on the Department of Labor’s recently released regulation on fee disclosures – something anyone involved with 401(k) plans should be up on.
Click here for the full article.
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Here is an update from the Financial Accounting Standards Board (FASB) that relates to Defined Contribution Pension Plans.
Accounting Standards Update (ASU) No. 2010-25, Plan Accounting – Defined Contribution Pension Plans (Topic 962): Reporting Loans to Participants by Defined Contribution Pension Plans.
This ASU applies to any defined contribution pension plan that allows participant loans. The amendments in this ASU require that participant loans be classified as notes receivable from participants, which are segregated from plan investments and measured at their unpaid principal balance plus any accrued but unpaid interest.
The amendments in this ASU are effective for fiscal years ending after December 15, 2010, and should be applied retrospectively to all prior periods presented. Early adoption is permitted.
This ASU was issued as a result of the consensus reached by the Emerging Issues Task Force in Issue No. 10-C at its meeting of September 16, 2010.
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Marlena Romero is one of our dedicated team members working on employee benefit audits. As a Senior Associate with Piercy Bowler Taylor & Kern she also works on government, finance and gaming audits.
When you meet Marlena, as her about being a pirate at Disney World, her hometown-home of the largest enchilada, and her unhappy love for comics.
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Now that you know why selecting an auditor for your employee benefit plan is important and have solicited proposals, the next step is actually selecting an auditor. These next few topics will ensure you pick the auditor best suited for your plan’s needs.
Q: Should a plan auditor have experience in auditing employee benefit plans? How many plans does the firm audit?
A: An employee benefit plan audit requires the use of testing in areas that are specific to this industry, therefore the more experience and training an auditor has with these audits; the more familiar they will be with the technical standards required.
PBTK has been an auditor of employee benefit plans since 1992, and has recently worked with more than 40 employee benefit pension and profit sharing plans. Our auditors receive ongoing education and training related to plan accounting, auditing and reporting. We are continually learning and staying ahead of the latest developments in employee benefits and we strive to maintain continuity of staffing on each engagement. With PBTK, you can have the confidence of knowing that we take a personal interest in what our clients do and how they do it.
Q: Should I check licenses and/or request references?
A: Yes, federal law requires that an auditor of employee benefit plans is licensed as a certified public accountant by a State Board of Accountancy. As such, you may verify that the auditor has a valid and current license to provide auditing services. Likewise, prior to engaging an auditor you can discuss with them their work with other employee benefit plan clients. PBTK is registered with the Nevada State Board of Accountancy and as mentioned has been involved in the audits of over 40 employee benefit plans recently. See a list of representative PBTK clients here.
Posted in EB Audits
So you’ve realized that for the first time your employee benefit plan will require a financial statement audit. The next step is picking an auditor, but where do you begin? Where should you look? What characteristics should the auditor have? What can the auditor provide to you? Before you decide which audit proposals you should consider, think about these two questions:
Q: Why is the choice of an auditor important?
A: A quality audit will help ensure the protection of plan assets and that necessary funds are available to pay retirement, health, and other benefits to employees. Secondly, a quality audit will ensure that the audit is concluded completely, accurately and timely. The Department of Labor (DOL) has increased its enforcement of the audit requirement recently and has the ability to fine the plan administrator for a deficient filing. Specifically, the DOL can assess penalties of up to $1,000 per day against the plan administrator for each day the filing is deficient.
Q: Why should I select an independent auditor? What is “independence?”
A: The Department of Labor requires that plan sponsors select an independent auditor. An independent auditor is one that does not have any financial interest in the plan or the plan sponsor that could affect the auditor’s ability to give an unbiased opinion.
Next week we will discuss other guidelines for selecting an auditor, including licenses, reference and experience.
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Employee Benefit Plan Audit Principal, Kelly Parker CPA. 702-384-1120 or kparker@pbtk.com.
