According to Sheri Terens, CPA, a deficient employee benefit plan can have grave results:
An overwhelming amount of employee benefit plan audits are deficient, according to a new report issued by the United States Department of Labor (DOL). From a sample of 400 plan audits, 39% of the audits contained major deficiencies with respect to one or more relevant auditing standards. These deficiencies put plan assets and participants at risk.
Generally, the Employee Retirement Security Act of 1974 requires employee benefit plans with 100 or more participants to have an audit as part of their annual 5500 filing. The sponsor of a plan has the responsibility to engage an independent qualified public accountant. However, auditing of benefit plans requires years of experience and training in order to ensure they are performed according to proper standards and regulations, providing the utmost assurance that the plan assets and participant accounts are protected.
As an employer and a fiduciary to your Company plan, you are obligated to make the best choices on providers that service your plan in any capacity, investment advisor, record-keeper, auditor, etc. Fiduciaries that do not follow the basic standards of conduct may be held personally liable. The DOL has stepped up enforcement and has the right to reject plan filings with deficient audits and assess penalties up to $1,100 per day.
It only takes one correspondence from the Department of Labor to turn everything you have worked for upside down. Allow Corrigan Krause to help you get prepared.