PLANADVISER - November/December 2018 - 39

sample for eligibility, deferrals and loans.
Jim O'Shaughnessy, managing partner, Sheridan Road
Financial, in Northbrook, Illinois, says the average adviser
is, generally, not part of an annual audit, outside of helping
to gather information and documents upon the auditor's
request. He says what is more important is the work
advisers do to guide plan sponsors in relation to their fiduciary
responsibilities throughout the year.
With all clients, his firm provides fiduciary training and
encourages them to take minutes at meetings, review how
the plan is being administered, look at plan design and make
sure the plan committee understands how the plan should
be operating. O'Shaughnessy says such reviews should be
done periodically, and the processes should be documented
as much as possible. Sheridan Road facilitates the storing
of information by providing an electronic fiduciary vault for
its clients.
According to Roberts, advisers do not need to get involved
in the audit. Instead, they might reach out to whomever is
in charge of payroll at the company and educate that person
or team about what the plan committee does and make sure
the plan is administered according to the plan document.
He says a full-scope audit, if the plan sponsor is prepared
in advance, can take as little as 20 to 30 days, but if the CPA
flags something as deficient and requires follow-up, the
audit can drag on until the accountant has enough information
to finish the audit process.
DOL Investigative Audits
Besides the annual audits, plan sponsors might find themselves
facing the DOL in an investigation.
The DOL could choose to investigate a plan in several
ways, Roberts says. There may be a participant complaint.
Or the agency may see a response on Form 5500 that is
inconsistent with another response, or it could not like a
sponsor's answer on a compliance questionnaire. Sometimes,
audits are just routine and random.
He also notes that the DOL has multiple enforcement
projects underway: The agency is evaluating employee stock
ownership plans (ESOPs); investment conflicts; distribution
deals with terminated, vested participants; distressed
plan terminations; and abandoned plans. In addition, he
observes, if a plan sponsor files for bankruptcy, it is likely
to be investigated.
Roberts says the DOL will request a range of documents
and ask approximately 36 standard questions. Typically,
the audit goes back three to four years, but if the DOL finds
something questionable, it may go back further. The agency
wants to see that the plan is operating as specified by the
plan document. It will study the documents creating and
describing the plan, plan reporting, plan administration,
fidelity bonds, participant statements, contributions, loans,
meeting minutes, assets and accounting, summary payroll
reports and schedules of loans.
According to O'Shaughnessy, the DOL will look for
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PLANADVISER - November/December 2018

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