Dec 21
This year, when you make New Year’s resolutions, be sure to have one about checking on the fees you pay to administer your plan. Even a company like Walmart, with its extensive legal resources, recently agreed to pay $13.5 million dollars along with Merrill Lynch for a class action settlement. Without admitting any fiduciary wrongdoing, they agreed to eliminate funds from their plans that carried high fees. A few reminders:
- Know what fees you pay and be prepared to justify them to your plan participants as well as the DOL.
- Be sure that record-keeping fees are documented separately from investment management fees.
- Diversify your plan portfolio, offering choices to plan participants.
- Communicate all changes to your plan participants and employees – clearly and promptly to avoid any misunderstandings.
Your plan auditor is a good source of information about ways to keep your plan in top fiduciary shape. Another good resource is the AICPA’s Accounting and Auditing Resource Centers.
Feb 04
If your benefit plan was audited, then you likely spent hours going through files pulling basic information for your auditors. You may have pulled files from storage or from different offices. Worse, you may have educated your plan auditors on the basics of the plan when they had a plan document and summary plan description to read, which you gave them. You may have even found yourself researching payroll records for various employees for the entire fiscal year to determine why their employee contributions are different than the ones calculated by the auditors. Read the rest of this entry »
Nov 23
The annual audit of your employee benefit plan is a fact of life. But, you also have other work that requires your attention. Hiring the right auditor and making a few up-front requests can save you time and save your company’s money.
Three ways to streamline your audit:
1. Request a list of information needed by the auditor prior to his or her arrival. You’ll be ready for them and they can get started right away.
2. Prepare a plan document and summary plan for the auditor to read in advance.
3. Request an auditor with direct experience with employee benefit audits.
If any of the above items are missing, then much of your time may be wasted due to inefficiency and/or inexperienced auditors. Even if a firm has a significant benefit plan audit resume, requesting an auditor with specific experience will improve your outcome. It’s a win-win situation: ensuring your satisfaction likely pays off in returning business.
Even the best audits will cost you time and money. By design, there is no way around this reality. However, you can get significantly better value by finding a firm in your area that is a member of the AICPA Employee Benefit Plan Audit Quality Center. Member firms demonstrate a commitment to quality. And, by being prepared in advance, you’ll have better use and control over your own time.