Plan sponsors should note that their younger participants (30 and under) are increasing their IRA investments – and might want to do the same with their 401(k) plan account. Read an article from Steve Garhuasen at Employee Benefit News to learn more.
“The final IRS 403(b) regulations introduced a number of new requirements for plan sponsors, the most significant of which clearly designates the plan sponsor as ultimately accountable for the plan’s proper administration. To effectively administrate their organization’s retirement plan, sponsors need to gather information from their plan’s providers and examine and implement procedures for routinely acquiring plan information.”
Read the full story at Employee Benefit News.
PBTK recently attended the Southern Nevada Human Resources Association Spring Mix-A-Fair event where companies and HR professionals were able to mingle while discussing the current issues that face them. We were there to offer tips on how employee benefit plan sponsors can better work with their auditors on their next 401(k) plan audit.
If you attended the event, and would like PBTK to review your 401(k) plan for a free audit estimate, please leave a comment on this blog post, including your phone number, or send an email to Kelly Parker at firstname.lastname@example.org.
Leah Carlson Shepherd of Employee Benefit News writes, “The funded status of the nation’s largest defined benefit pension plans improved by $16 billion in March, according to a new analysis by Milliman. This increase is primarily due to a rise in corporate bond interest rates that are used to value pension liabilities.”
Click here for the full article in Employee Benefit News.
This may be the first year your 401(k) plan requires an audit, and as the plan sponsor you are probably wondering what you can expect from the team of auditors who show up at your office. As a CPA firm that audits more than 25 employee benefit plans each year, we have to be very organized in our approach to the audit. There are three phases to a typical audit – planning, on-site information gathering, and the review. Unlike other firms, Piercy Bowler Taylor & Kern (PBTK) has a dedicated team that always works on the employee benefit plans year after year, resulting in consistent service for our clients. Everyone on our audit team has at least three years of experience and it consists of a Shareholder, Manager, Senior Associates and an Associate.
The full team, led by the Shareholder, participates in the planning process prior to the audit – preparing the required schedules, requested documents, and a timeline. Team assignments are also given at this time. For example, one person on the PBTK team reviews all of the SAS 70 reports, which creates an efficiency of scale on all of the plans audited by the firm. Audits are done more timely when each team member has a specialty.
On Site Team
Typically, auditors spend one or two days at your office during the audit. A Manager, Senior Associate and an Associate visit the client and perform participant testing and review employee benefit plan records, including contributions. The data they collect is taken back to the team to review.
The Shareholder is key to the review phase. While the rest of the team has prepared the audit documents, the Shareholder has the experience to finalize and sign-off on the audit. The Shareholder in our firm is Kelly Parker – he leads the employee benefit audit team, and is always available to answer clients’ questions, though he is most involved in the planning and review phases of the audit.
It takes this complete team of auditors, following the planned steps, to complete a high-quality, thorough audit of any employee benefit plan.
After doing an anti-fraud campaign , the Department of Labor uncovered a fraction of employers who abuse the employees’ contribution plans for their own gain. The DOL has provided a list of red flags to watch out for in your own plan, so you can detect fraud early on:
- Your 401(k) or individual account statement is consistently late or comes at irregular intervals
- Your account balance does not appear to be accurate
- Your employer failed to transmit your contribution to the plan on a timely basis
- A significant drop in account balance that cannot be explained by normal market ups and downs
- 401(k) or individual account statement shows your contribution from your paycheck was not made
- Investments listed on your statement are not what you authorized
- Former employees are having trouble getting their benefits paid on time or in the correct amounts
- Unusual transactions, such as a loan to the employer, a corporate officer, or one of the plan trustees
- Frequent and unexplained changes in investment managers or consultants
- Your employer has recently experienced severe financial difficulty
Are participants in your plan finally feeling confident in investing again? Read this recent article from Employee Benefit News.