Post on 24-Dec-2015
transcript
Audit Communicationsand
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
Satis-factory
68%
De-fi-
cient32%
Deficient Audit Quality
DOL update 5/5/2014
State of Tennessee
SELECTING AN AUDITOR FOR YOUR PLAN
1-2 3-5 6-24 25-99 100-749 750+0
50
100
150
200
250
300
350
400 Total # of Plans
# of Audits
Experience Matters
SELECTING AN AUDITOR FOR YOUR PLAN
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
Who does the auditor work for anyway?
SELECTING AN AUDITOR FOR YOUR PLAN
The audit’s purpose:
• Protect plan participants and beneficiaries
• Fulfill the sponsor’s fiduciary obligations to the plan
Plan Sponsor Resource Center
SELECTING AN AUDITOR FOR YOUR PLAN
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.
Audit Quality Study
DOL INITIATIVES
• 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
DOL INITIATIVES
• Achieved over $1.6 billion in total monetary results in FY 2013
Employee Benefits Security Administration
• $281 million restored Informal Complaint Resolution
• $911 million Prohibited Transactions Corrected/Plan Assets Corrected
• $423 millionPlan Assets Restored/Participant Benefits Recovered
• $72 millionVoluntary Fiduciary Correction Program
http://www.dol.gov/ebsa/newsroom/fsFYagencyresults.html
Lost Participants
DOL INITIATIVES
• 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
Late Deposits of Employee Contributions
DOL INITIATIVES
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.
Small Employer Safe Harbor
DOL INITIATIVES
• 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