Employee Benefit Plan Audit Requirement FAQs

What are the most common questions related to employee benefit plan audits?

Employee benefit plan audits are required for a majority of plans that are covered by the Employee Retirement Income Security Act of 1974 (ERISA). With an increased scrutiny on employee benefit plan audits, the Schneider Downs ERISA group has prepared a ERISA Audit FAQ Guide to help parties better understand the requirements and types of benefit plan audits. 

 Download the FAQ 

The guide covers several topics including the required filings, characteristics to look for in an audit firm, and advice on preparation for an audit, with  additional questions including:

What reporting and disclosure requirements are associated with a plan subject to ERISA?

There are a number of different federal reporting and employee disclosure requirements associated with maintaining a benefit plan that is subject to ERISA.  While many of these requirements are consistent across all types of ERISA plans (Form 5500 reporting, for example), others depend upon a plan’s specific provisions and features.

To assist plan sponsors with identifying their reporting and disclosure responsibilities, the Department of Labor has published a Reporting and Disclosure Guide for Employee Benefit Plans, which can be found at https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/publications/reporting-and-disclosure-guide-for-employee-benefit-plans.pdf

When is an audit of an employee benefit plan required?

Generally, employee benefit plans with 100 or more participants (includes eligible, but not participating as well as separated employees with account balances) are considered to be “large” plans and are required to have an audit performed on an annual basis. Plans with fewer than 100 participants (“small” plans) generally do not require an audit to be performed.

What are the five most common tips for a successful employee benefit plan audit?

  1. Prepare and be proactive: Ensure that the timing of the audit is agreed upon with the audit team and ensure the audit team has provided the client assistance listing in advance of fieldwork.
  2. Suggest alternatives: If there are difficulties in fulfilling an audit request, talk to your audit team. There maybe alternative reports your auditor can use to accomplish the required test.
  3. Communicate: Request regular status meetings with your audit team to discuss open items, testing exceptions, and more.
  4. Set Realistic timelines: The timeline should be agreed upon by both the plan sponsor and the audit team in advance. If the plan is going through an audit for the first time, make sure to build additional time into the schedule.
  5. Ask Questions: Audit teams welcome the opportunity to answer questions. The audit process should be an interactive process.

You can view the complete FAQ at www.schneiderdowns.com/erisa-frequently-asked-questions and download the PDF version here

About Schneider Downs ERISA

The Schneider Downs ERISA audit practice consists of a service model that is not limited to attest services, but includes providing support and oversight to clients, year-round access to experts, annual education seminars for clients that includes both regulatory and accounting updates, and more.  For more information, visit www.schneiderdowns.com/audit-assurance-services-employee-benefit-plans.

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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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