401(k) Audit Requirements
Employers with 100 or more employees who are eligible to participate at the beginning of a year are required to have their plan audited.
If required to be audited, the employer must find an independent, qualified auditor to perform the audit.
The regulatory deadline to complete the audit is July 31st, which can be extended to October 15th.
All aspects of the plan will be tested to be sure operations are in compliance with the plan documents and laws and regulations.
Once the audit is completed, it must be attached to the Form 5500 for filing with the Department of Labor.
Their stellar performance bolsters our credibility with clients and we look forward to continuing to recommend them as auditors!
Frequently Asked Questions about a 401(k) Plan Audit
We have listed a few of the most frequently asked questions about a 401(k) Audit and the the requirements of an employee benefit plan.
What are the Department of Labor (DOL) and IRS audit requirements for a 401(k) plan?
A 401(k) plan's audit requirement is based on the number of employees categorized as eligible participants every year. The DOL terms an employee benefit plan as a "large plan" and requires it to be audited in any year that it has over 100 eligible participants as of the beginning of the year. (See below for a discussion of participant eligibility.) The audit must be attached to the Form 5500, which must be filed by July 31st, unless extended to October 15th.
As with many other government regulations, there are exceptions:
How do I tell how many eligible participants my plan has?
There are three types of eligible participants that need to be included in your number:
What will my 401(k) auditors request?
There are several forms we will need to complete your 401(k) audit. These forms will come from your organization, record keepers, custodians of the investment, and your third-party administrator, to name a few. Through Autire, you will be able to invite the key players in your plan to digitally upload documents securely, so that you can focus on your business instead of endless back and forth to secure the necessary documents. Autire uses two-step authentication to ensure that you can upload documents related to your plan securely.
The following documents are necessary to complete a 401(k) audit:
Summary Plan Description
Basic Plan Document
IRS Opinion Letter
Agreements with service providers
Amendments made to the plan
Participant Summary Report
Fidelity bond (coverage for full year)
Committee Meeting Minutes
SOC 1 Type 2 Reports
How long will the audit take?
The audit is expected to take a few weeks, depending on how quickly you provide us with the information required.
Does the auditor need to be in my city?
No, with current technology an audit can be performed remotely regardless of which city or state your business resides. This also means that auditors no longer need to come to your office and disrupt your normal business practices. We perform audits nationwide. It’s a win-win for everyone.