401(k) Audit Solutions

401(k) plans are governed by ever-changing rules and regulations issued by Congress, the IRS, DOL, ERISA, and the Social Security Administration. Our 401(k) auditors have years of experience and perform over 60+ audits annually.

An incomplete, late, or inadequate 401(k) audit report may result in significant penalties and plan termination. Our standard, 6-phase 401(k) audit services is a comprehensive process, performed virtually and on your schedule.

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We Audit All Types of EBP

Walters & Associates, CPAs offers a free, no obligation consultation to answer any questions you may have about audit requirements for your companies benefit plan.

Who performs an annual 401(k) audit?

Audits must be performed by an independent auditor that does not have ties to the employer or the plan. This means that financial companies that manage recordkeeping, accounting, and/or financial statements for your business cannot perform your plan’s annual 401(k) audit—as they aren’t considered independent sources.

How much do 401(k) audits cost employers?

The cost of audits depends on different factors, including business size and audit type. According to some sources, annual audit costs range from $8,000 to $12,000 for small- to medium-sized businesses (plans with fewer than $50 million in assets)—although some audit fees have been as high as $18,000.

Limited scope audits require less review, so they’re often more affordable than full-scope audits.

Our Services

Employee Benefit Plans

We audit following plans below

401(k) Plans

A 401(k) plan is a company-sponsored retirement account in which employees can contribute a percentage of their income. Employers often offer to match at least some of these contributions.

403(B) Plans

A 403(b) is a retirement plan offered by public schools and non-profit organizations and is similar to a 401(k) plan. A 403(b) plan is designed for certain employees of tax-exempt organizations.

Pension plans

A pension plan is an employee benefit that commits the employer to making regular contributions to a pool of money set aside to fund payments to eligible employees after they retire.

Profit-Sharing plans

A profit-sharing plan gives employees a share in the profits of a company. Also known as a deferred profit-sharing plan (DPSP), an employee receives a percentage of a company’s profits based on its quarterly or annual earnings.

FAQ

What are the employee benefit plan audit requirements & due dates?

Generally, a plan must be audited when it has more than 100 participants with balances on the first day of the plan year. If the plan hasn’t been audited, then you use the 80-120 rule. Plans that have between 80 and 120 participants with balances on the first day of the plan year are permitted to file their Form 5500 in the same way they did the prior year. If you filed a 5500- SF (short form) in the prior year and your participants with balances count remains below 120, you can continue to file a short form without an audit. Once you reach above the 120 participants with balances on the first day of the plan year, the audit requirement is met.

The audit must be completed prior to the Form 5500 filing deadline as your audited financial statements are submitted with your Form 5500.

The Form 5500 filing deadline is the last day of the seventh month following your plan’s year-end, which is July 31st for calendar year plans. You may apply for an automatic extension by filing a Form 5558. The extension extends the due date 2 ½ months. For calendar year plans, the extension extends the due date to October 15th.

How long does the employee benefit plan audit take?

The audit process takes 6-8 weeks on average; however, this range is heavily influenced by response time. We’ve completed audits in as short as 3 weeks.

If you have received a notice from the Department of Labor due to an incomplete filing and need an audit as soon as possible, we will work diligently with you to get your audit completed as soon as possible without sacrificing quality.

What information and documentation do I need to send you?

We will send you a request list at the beginning of the audit process that contains the information we need to start and successfully complete your audit. We also work with your plan’s service provider(s) to securely access information directly from them (or their site) for efficiency and to reduce the burden. Our commitment is to make your life easy!

ERISA Section 103(a)(3)(C) audit or a non-Section 103(a)(3)(C) audit?

ERISA Section 103(a)(3)(C) Audit – Formerly called a limited scope audit, Plan management can choose to exclude from the audit certain investment information that is held and certified by a qualified institution (as long as an investment certification is available and the institution is qualified under Department of Labor rules and regulations). All other balances and transactions are subject to the same audit procedures as a non-Section 103(a)(3)(C) audit.

Non-Section 103(a)(3)(C) Audit – Formerly called a full scope audit, this audit requires all the major account balances and transactions to be audited, including audit procedures over the investments.

What are the most common audit findings?

Eligible compensation that is excluded from the calculation of participant and employer contributions.
Untimely (and missed) remittances of participant contributions to the plan.
The failure to update participant deferral elections, or changes to them, in the payroll system.
Participants eligible to participate are not made aware of their eligibility or ineligible participants are participating in the plan.
The failure to enroll automatically enrolled participants timely and the failure to auto-escalate participants.

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