“Nine Charged in Theft from Employee Benefit Plan” reads yet another headline about an employee benefit plan fraud case. Fraudulent activities have continued to increase through the years, and employers need to ensure that their plan is protected. Fraud within employee benefits plans can involve owners, officers, accounting staff, plan administrators and service providers. Fraudulent activities can range from theft and embezzlement of plan assets using forged checks to failure to pay pension benefits due to employees.
All of these headlines remind plan sponsors about the importance of safeguarding their employee benefit plans. This can be accomplished by implementing effective internal controls. Effective internal control protects a plan in two ways:
- By minimizing opportunities for unintentional errors or intentional fraud that may harm the plan, and
- By discovering small errors before they become big problems.
The Employee Benefit Plan Audit Quality Center has updated its plan advisory “The Importance of Internal Controls in Financial Reporting and Safeguarding Plan Assets”. The plan advisory contains information on how to establish cost-effective controls and monitor controls and provides examples of selected controls for plans. For a copy of the publication, simply send your request to firstname.lastname@example.org.
More information regarding fraudulent cases involving employee benefit plans can be found at the U.S. Department of Labor (DOL) Employee Benefit Security Administration’s Criminal Enforcement publishes news releases related to criminal activity.
2014 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.
This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.