PLANADVISER - November/December 2018 - 38
servicing strategies
Weathering Audits
R
etirement plan sponsors with more than 100 participants
in their 401(k) or 403(b) Employee Retirement
Income Security Act (ERISA) plans are required to
provide an annual financial audit corresponding to their
Form 5500 filing. Moreover, the Department of Labor (DOL)
has ramped up enforcement efforts concerning ERISA plans
and an adviser may have clients that receive a letter initiating
an investigative DOL audit.
What should plan advisers know about these audits, and
how can they help a client that needs to undergo one?
Annual Financial Audits
According to Jason Roberts, CEO of the Pension Resource
Institute and managing partner with Retirement Law Group
in San Diego, California, what the annual financial audit
covers depends on whether it is a limited- or full-scope audit.
He explains that if investments or plan assets are held with
a qualifying financial institution, bank or trust company
and if that company is willing to certify the value of investments,
then the plan auditor will perform a limited-scope
audit. Otherwise, a full-scope audit will be performed, and
The DOL has extended the scope of its examinations
the auditor will evaluate the safeguarding of investments.
Roberts says ever since the DOL issued guidance that
plan sponsors should look for auditors with expertise in
ERISA plans, his firm has seen audits become more in-depth
and plan sponsors needing to make more corrections. For
example, he says, a plan may say employees can make deferrals
on their regular salary and bonuses, but the bonuses
may be paid through a different channel than salaries, and,
as a result, deferrals on the bonuses may be missed.
Further, over the last few years, Certified Public Accountants
(CPAs) performing plan audits have delved deeper
into plan sponsors' fiduciary duties, Roberts says. They are
looking at the processes plan sponsors use to make fiduciary
decisions, receipt of 408(b)(2) plan sponsor fee disclosures,
and whether plan sponsors have documented that they
have reviewed service provider offerings and fees.
He adds that CPAs are armed with questionnaires about
plan objectives, plan design, parties in interest to the plan,
participant census data, plan documents, IRS determination
letters, proper monitoring of assets, internal controls
and fraud risk determination testing. CPAs also do a test
38 | planadviser.com November-December 2018 Art by Lisk Feng
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PLANADVISER - November/December 2018
Table of Contents for the Digital Edition of PLANADVISER - November/December 2018
Weathering Audits
Protection for Your Practice
The Case for Roths
SEC on Rollovers
ERISA Section 409(b)
403(b) Litigation Update
PLANADVISER - November/December 2018 - C1
PLANADVISER - November/December 2018 - FC1
PLANADVISER - November/December 2018 - FC2
PLANADVISER - November/December 2018 - C2
PLANADVISER - November/December 2018 - 1
PLANADVISER - November/December 2018 - 2
PLANADVISER - November/December 2018 - 3
PLANADVISER - November/December 2018 - 4
PLANADVISER - November/December 2018 - 5
PLANADVISER - November/December 2018 - 6
PLANADVISER - November/December 2018 - 7
PLANADVISER - November/December 2018 - 8
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PLANADVISER - November/December 2018 - 11
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PLANADVISER - November/December 2018 - 33
PLANADVISER - November/December 2018 - 34
PLANADVISER - November/December 2018 - 35
PLANADVISER - November/December 2018 - 36
PLANADVISER - November/December 2018 - 37
PLANADVISER - November/December 2018 - Weathering Audits
PLANADVISER - November/December 2018 - 39
PLANADVISER - November/December 2018 - 40
PLANADVISER - November/December 2018 - 41
PLANADVISER - November/December 2018 - Protection for Your Practice
PLANADVISER - November/December 2018 - 43
PLANADVISER - November/December 2018 - The Case for Roths
PLANADVISER - November/December 2018 - 45
PLANADVISER - November/December 2018 - SEC on Rollovers
PLANADVISER - November/December 2018 - ERISA Section 409(b)
PLANADVISER - November/December 2018 - 403(b) Litigation Update
PLANADVISER - November/December 2018 - C3
PLANADVISER - November/December 2018 - C4
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