CRI trains our clients

Any athlete knows that preparation is critical to success. The key is to know where to focus your efforts for maximum results. When it comes to the high-stakes DOL examinations, our benefit plan professionals have the inside scoop on the DOL’s game plan. The following benefit plan audit checklist highlights just a few of the areas on which we typically recommend our clients focus so that they can get into fighting shape.

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Checklist: 5 Critical Preparation Steps for a DOL Audit

Follow these steps to help prepare.

An experienced coach often means the difference between a win and a loss. If you are seeking an auditor who is up to the task of proactively keeping your plan in fighting shape, then contact CRI’s employee benefit plan audit team today.

Working Out Your Benefit Plan Audit Decision

Use the chart below to determine whether a benefit plan audit is the right exercise for your company.

Working Out Your Benefit Plan Audit Decision: Notes

Participants are defined by the DOL as follows:

Active participants

– Any employed individuals who are covered by a plan and who earn or retain credited service under a plan;

– Any individuals who are currently below the integration level in a plan that is integrated with Social Security and/or eligible to have the employer make payments to a 401(k) or Section 125 arrangements (participants only have to be eligible for the plan; they do not have to participate  in a 401(k) or Section 125 arrangement);

– Any nonvested individuals who are earning or retaining credited service under a plan.

This term does not refer to nonvested former employees who have incurred the break in service period specified in the plan.

Inactive participants

– Any individuals who are retired or separated from employment covered by a plan and who either receive or are entitled to receive benefits.

This term does not refer to any individual to whom an insurance company has made an irrevocable commitment to pay all the benefits to which the individual is entitled under the plan.

Deceased participants

– Any deceased individuals who have beneficiaries who receive or are entitled to receive benefits under the plan.

This term does not refer to any individual to whom an insurance company has made a binding commitment to pay all the benefits to which the beneficiaries of the individual are entitled under the plan.

Plans with between 80 and 120 participants (inclusive) at the beginning of a plan year may choose to file the same category of form it filed the previous year (for example, Form 5500, Schedule I) and avoid the audit requirement. This rule means that plans with between 80 and 120 participants at the beginning of the plan year that filed a Form 5500, Schedule I the year before may elect in the current year to complete the Form 5500 in accordance with the requirements for a small plan. There is no limit to the number of years this election can be made.
If a Form 5500 is filed, then an audit of the financial statements generally is required except for in the following circumstances:

1. Plans that have a short plan year (i.e., of seven months or less) may choose to postpone (but not eliminate) the audit requirement.

2. Plans whose sole assets are insurance contracts that fully guarantee benefit payments are not required to be audited.