Bio
• Partner with Brown, Edwards & Company, LLP
• Tax, healthcare, consulting and EBP services
• 20 years of experience
• BE is the 124th largest US firm out of 330,000
• 7 office locations and 200 employees
• Firm is a member of the AICPA EBPAQC
• Firm performs over 100 EBP audits per year
• Firm also provides TPA services and assists with
plan designs and documents
Discussion Topics
• Role of regulators (DOL and IRS)
• Plan sponsor responsibilities
• Employee benefit plan examination process
• Plan sponsor compliance and preparation
• Correcting plan errors
• Hot topics
• Questions
Roles of Regulators
• IRS has primary jurisdiction over qualified plans,
which includes examining plans and processing
requests for determination letters.
• Department of Labor (DOL) has primary
jurisdiction over the fiduciary standards,
reporting and disclosure requirements and other
rules.
Plan Sponsor Responsibilities
Keeping the plan in compliance:
• Plan document written to comply with all
requirements of the IRC.
• Plan administered to follow the terms in
operation.
• Review the plan annually to make sure it’s
operating according to its terms and the law.
Examination Process
Key focus areas include:
1. Eligibility, participation and coverage
2. Vesting
3. Discrimination
4. Top heavy requirements
5. Contributions and benefit limits
Examination Process
6. Funding and deductions
7. Distributions
8. Trust activities
9. Plan and trust documents
10.Returns and reports
Compliance & Preparation
Top 10 tips to prepare for an efficient audit
1. Have readily available: Plan documents, including amendments, SPD, etc.
Opinion letters/determination letters
Requested records efficiently organized
Agreements with service providers
2. Have appropriate people available Trustee, custodian, attorney, etc.
3. Be prepared to explain terms of the plan
Compliance & Preparation
Top 10 tips to prepare for an efficient audit
4. Be prepared to explain operation of the plan Administrative forms (deferral agreements, etc.)
Loan and hardship documentation
5. Be prepared to provide all applicable test
results
6. Be prepared to explain internal administrative
processes Practices and procedures (payroll, remittances)
Internal controls
Compliance & PreparationTop 10 tips to prepare for an efficient audit
7. Be prepared to identify plan errors
8. Be prepared to provide information about related employers/entities
9. Consider utilizing annual self-audit as a verification tool (small plans not subject to audit)
10.Consider utilizing available IRS resources
Compliance & Preparation
So how can I keep up with compliance and be
prepared?
• IRS 401(k) plan checklist (other plan types also
available)
• 401(k) Plan Sponsor fiduciary audit file checklist
(RBC Wealth Management as an example)
Correcting Plan Errors
The Employee Plans Compliance Resolution System (EPCRS) provides for 3 types of programs for correcting plan errors:
1. Self-correction program (late deferral payment remittance corrected with form 5330)
2. Voluntary correction program (failure to get plan audited and not yet notified by IRS of audit requirement)
3. Audit closing agreement program (errors fixed as result of IRS or DOL audit)
Hot Topics
• Plan amendment requirement for same sex
marriages – Windsor case – amendments
required by 12/31/14 if the plan defines spouse
as member of opposite sex and/or the plan
wishes to refer to the outcome of Windsor case
• Disclosure of plan fees – applicable for 2013
• 2015 changes – Eligible comp increased to
$265,000; deferrals increased to $18,000;
catch-up contribution (50 and older) increased
to $6,000
Contact Information
Stan Bowles, CPA
Partner
Brown, Edwards & Company, L.L.P.
P.O. Box 16999
Bristol, VA 24209-6999
Phone number: 276-466-5248
E-mail address: [email protected]
Website: www.becpas.com