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Audit Communications a nd DOL Initiatives

Audit Communications a nd DOL Initiatives. Selecting a Plan Auditor & DOL Initiatives. Brent Clark Audit Senior Manager, Pugh CPAs. Agenda. Selecting an Auditor DOL Initiatives Limited Scope vs. Full Scope Audit Audit Communications. SELECTING AN AUDITOR FOR YOUR PLAN.

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Audit Communications a nd DOL Initiatives

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  1. Audit Communications and DOL Initiatives

  2. Selecting a Plan Auditor & DOL Initiatives Brent Clark Audit Senior Manager, Pugh CPAs

  3. Agenda • Selecting an Auditor • DOL Initiatives • Limited Scope vs. Full Scope Audit • Audit Communications

  4. SELECTING AN AUDITOR FOR YOUR PLAN Deficient Audit Quality DOL update 5/5/2014

  5. SELECTING AN AUDITOR FOR YOUR PLAN State of Tennessee # of Audits

  6. SELECTING AN AUDITOR FOR YOUR PLAN Experience Matters • 50% of Plan Auditors • Audit 1 or 2 plans • 6% of audited plans • Covering 2 million participants • 1% of Plan Auditors • Audit 100 or more plans • 42% of plans audited • Covering 91 million participants

  7. SELECTING AN AUDITOR FOR YOUR PLAN Who does the auditor work for anyway? • The audit’s purpose: • Protect plan participants and beneficiaries • Fulfill the sponsor’s fiduciary obligations to the plan

  8. SELECTING AN AUDITOR FOR YOUR PLAN Plan Sponsor Resource Center • It is the plan administrator’s responsibility to ensure the plan obtains a quality audit in accordance with ERISA and the DOL. • www.aicpa.org > Interest Areas > Employee Benefit Plan Audit Quality Center > Resources > Plan Sponsor Resource Center • Solicit RFPs from Audit Quality Center members • Obtain references and discuss the auditor’s work with other clients • Verify the auditor’s license is valid and up-to-date.

  9. DOL INITIATIVES Audit Quality Study • Nationwide study of 400 plan audits covering 250 firms • Still ongoing • October 2013-September 2014 • Requests for workpapers are sent to the plan administrators • Desk review is performed by the Office of the Chief Accountant

  10. DOL INITIATIVES http://www.dol.gov/ebsa/newsroom/fsFYagencyresults.html

  11. DOL INITIATIVES Lost Participants • According to the DOL the State of TN Unclaimed Property process should not be used for lost participant’s funds in active plans • November 2013 ERISA Advisory Council Report recommends • Development of industry best practices • The DOL issue an update to FAB 2004-02 and address the fiduciary obligations to locate lost participants • Further coordination with other government agencies

  12. DOL INITIATIVES Late Deposits of Employee Contributions An employer is required to deposit employee contributions and participant loan payments as of the earliest date on which such contributions or repayments can reasonably be segregated from the employer's general assets,but in no event no more than… (a) 90 days after the contributions are paid by employees or withheld from their wages for a welfare benefit plan or (b) the 15th business day following the end of the month in which amounts are contributed by employees or withheld from their wages for a pension benefit plan.

  13. DOL INITIATIVES Small Employer Safe Harbor • Small employer is eligible to file Schedule I or SF – not Schedule H • Seven business days of payroll date • Reasonable conclusion – contributions in excess of seven days are at risk of challenge by the DOL

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