401(k) Audit Services in Columbus, GA. For Columbus, GA businesses that offer retirement plans, completing a 401(k) audit can seem like an uphill battle. Between compliance requirements from the Department of Labor (DOL) and IRS, collecting extensive documentation, and ensuring that your plan isn’t “top-heavy”, there are many factors to consider. However, with the right support, the 401(k) audit doesn’t have to feel like a burden and affect your daily business activities.
At Correct Capital, we understand that 401(k) audits can be a major source of stress even though they cannot be avoided. Our team will assist you with every aspect of document collection through meeting Form 5500 deadlines. Whether you're navigating your first audit in Columbus, GA, or looking to streamline a previously cumbersome process, we're here to minimize the hassle. You can book a meeting with a member of our advisor team, contact us online, or call us at 877-930-401(k) to get started.
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About 401(k) Audits
A 401(k) audit is an annual review necessary for Columbus, GA companies with more than 100 eligible participants in their 401(k) plan. Note: Even if you don’t have more than 100 employees actively participating in the plan, you must still undergo an audit if there are 100 who have the option to participate if they wanted. The audit confirms that the retirement plan complies with the regulations set by the Department of Labor (DOL) and the Employee Retirement Income Security Act (ERISA). It assesses the plan’s overall financial health, ensuring that employee contributions, distributions, and plan activities are accurately represented.
While necessary to meet legal requirements, 401(k) audits can be complicated and time-consuming. Correct Capital helps Columbus, GA businesses get ready for these audits by helping with document collection, ensuring comprehension of compliance testing, and other related tasks. With an experienced team by your side, handling the audit process can become a much easier process.
Why are 401(k) Audits Necessary for Columbus, GA Companies?
You must undergo a 401(k) audit for a variety of reasons, ensuring that retirement plans stay in line with federal regulations and protect both the employer and employees. Here’s why they are necessary:
- Compliance with DOL and IRS Regulations: The purpose of audits is to confirm that your 401(k) plan adheres to all legal requirements set by the Department of Labor (DOL) and the IRS, particularly under the Employee Retirement Income Security Act (ERISA).
- Preventing Discrimination: The audit ensures that the plan isn't overly advantageous to higher-paid employees (often called “top-heavy” testing) in order to promote the plan treats all employees fairly and equally.
- Identifying Operational Issues: Audits often expose errors in contributions, distributions, or other aspects of plan management, enabling you to resolve these issues before they result in fines.
- Filing Form 5500: The audit confirms the accurate and on-time filing of Form 5500, a required document detailing the plan’s financial status, needed to uphold compliance with DOL and IRS regulations.
- Contribution Limits: The audit ensures that employer and employee contributions remain within IRS limits for the year, preventing excess contributions that could lead to penalties.
- Fee Reasonableness: Auditors may examine plan fees to ensure they are reasonable and aren’t unnecessarily high for participants. High fees can raise compliance concerns and negatively impact how employees' investments and savings perform.
- Fiduciary Oversight: The audit verifies that Columbus, GA employers are acting in the best interest of plan participants, fulfilling their fiduciary responsibilities as mandated by ERISA.
- Verification of Plan Documentation: Verifying that the plan's documents, policies, and operational practices are aligned with regulatory guidelines is a vital part of the audit.
Types of 401(k) Audits
There are two kinds of 401(k) audits that Columbus, GA employers might come across, depending on factors such as the size and nature of their plan. The audit type typically depends on the number of participants and the complexity of the investments in the plan.
- Full-Scope Audit: This is the thorough audit required for most larger 401(k) plans. In a full-scope audit, the third-party auditor reviews all aspects of the plan, such as financial statements, adherence to Department of Labor (DOL) and IRS regulations, and participant data. The auditor examines supporting documentation for contributions, withdrawls, and other transactions to ensure accuracy and compliance.
- Section 103(a)(3)(C)) Audit: Previously referred to as a "Limited Scope Audit," these pertain to plans with investments overseen by a qualified, regulated financial institution (such as a bank or insurance company). The employer may be eligible for a limited-scope audit. In this type, the auditor is not required to audit the investment information endorsed by the financial institution, which can significantly reduce the audit’s complexity and cost. This can make it a preferable choice for some Columbus, GA businesses, as long as they meet the criteria.
The kind of audit your plan needs is determined by your plan’s unique features, such as the nature of its investments. At Correct Capital, we are able to assist you understand which type of audit your plan requires and ensure you're fully prepared for either process.
401(k) Audit Pain Points for Columbus, GA Employers
While 401(k) audits must be conducted to ensure compliance, they frequently pose difficulties for Columbus, GA employers, especially those running bigger 401(k) plans. Here are some of the key pain points that companies deal with:
- Document Collection and Management: Gathering the right documents, such as account statements, tax returns, and employee data, can be a lengthy process. Employers frequently have difficulties to arrange and file the necessary paperwork, notably in the case of larger, more complex plans.
- Compliance with Changing Regulations: Remaining compliant with shifting DOL, IRS, and ERISA regulations is difficult. Compliance oversights can lead to audit failures, fines, and pricey amendments in the long run.
- Discrimination Testing: Verifying that the plan isn’t top-heavy demands thorough checks for compliance and can necessitate additional documentation and reporting.
- Time and Resource Demands: Preparing for an audit takes HR professionals, business owners, administrators, and others off of their core responsibilities, heightening pressure and diverting attention from regular business activities.
- Form 5500 and Timely Submissions: Many businesses have difficulty with file Form 5500 properly and punctually, which is a key component of 401(k) compliance. Late submissions can result in penalties and cause additional problems for the company.
At Correct Capital, we are aware of the difficulties involved and provide tailored support to make the audit process in Columbus, GA smoother. Be it document collection or verifying adherence to regulations, our team takes on much of the work for you.
401(k) Audits for Multiple Employer Plans (MEP) and Pooled Employer Plans (PEP)
For Columbus, GA employers hoping to ease the administrative burden of a 401(k) audit, Multiple Employer Plans (MEP) and Pooled Employer Plans (PEP) can offer relief. These plans enable different employers to join a single 401(k) plan, frequently removing employer-specific audits.
- Multiple Employer Plans (MEP): These plans combine several unrelated employers into one 401(k) plan, lowering the expenses and simplifying the management of managing and auditing individual plans. This setup allows Columbus, GA businesses to share the administrative responsibilities and possibly eliminate the annual 401(k) audit altogether.
- Pooled Employer Plans (PEP): Introduced more recently, PEPs permit unrelated employers to participate in a collective 401(k) plan overseen by a pooled plan provider (PPP). This structure makes meeting regulations easier and lowers expenses, making it attractive for Columbus, GA businesses seeking to simplify their retirement offerings.
Both MEPs and PEPs can significantly reduce audit-related costs and time commitments, while ensuring regulatory compliance. Switching to these types of plans may be particularly attractive for small companies in Columbus, GA, who wish to provide a 401(k) plan but are overwhelmed by costs and admin tasks.
Working with the Right Columbus, GA 401(k) Audit Team
401(k) audits can seem difficult, but choosing the right support can greatly improve the process. Partnering with professionals that has a firm grasp of both technical and practical elements of the audit process reduces the time and pressure you face. Here’s why working with the right specialists is crucial:
- Experience and Expertise: A skilled team will be familiar with the complexities of 401(k) audits, including both full-scope and limited-scope audits. We will assist you with the documentation process and pinpoint potential improvements within your plan.
- Compliance Assurance: The right team helps you remain up to date with evolving regulations, ensuring that your plan meets all necessary standards.
- Tailored Support: Each 401(k) plan has unique requirements. An experienced team will collaborate with you to identify the unique needs of your plan and guide you in preparing for your specific audit requirements. Correct Capital handles more than 37 plans in both small and large companies, and represents over $212 million in total plan assets across the United States, enabling us to understand the specifics of any company 401(k) plan.
- Saving Time and Resources: Preparing for a 401(k) audit can distract you significantly from day-to-day operations. The right partner will take on much of the administrative burden, enabling your HR and finance teams to focus on other priorities. Correct Capital helps streamline the process, reducing the pressure on your internal team.
- MEPs and PEPs Expertise: For businesses enrolled in an MEP or PEP, while an individual plan audit is no longer mandated, you're still required to comply with all the rules and regulations, but with fewer administrative responsibilities after plan year end.
*as of March 2024
Partnering with a well-informed, reliable team is crucial for guaranteeing your 401(k) audit in Columbus, GA runs efficiently and stress-free. With Correct Capital supporting you, you’ll have the confidence that your audit will be completed efficiently and accurately.
Call Correct Capital for Help With Your 401(k) Audit in Columbus, GA
Complying with 401(k) audits is both a regulatory obligation and an opportunity to verify your Columbus, GA company's retirement plan remains as beneficial as possible to your employees. Correct Capital’s experience in assisting Columbus, GA businesses complete the 401(k) audit lightens the load, letting you prioritize your business while ensuring you're not penalized for non-compliance.
Contact Correct Capital today to book a meeting and allow us to assist you get ready for a streamlined, effective audit. Our team of experts will help with all aspects from document collection to compliance checks, making sure your plan is set up for success. You can schedule a meeting with a member of our Columbus, GA advisor team, contact us online, or call us at 877-930-401(k) to start the process.
