401(k) Audit Services in Des Moines, IA. For Des Moines, IA businesses that offer retirement plans, completing a 401(k) audit can feel like an uphill battle. Between compliance requirements from the Department of Labor (DOL) and IRS, organizing necessary documents, and ensuring that your plan doesn't disproportionately benefit higher-paid employees, there are many factors to consider. However, with the right support, the 401(k) audit doesn’t have to feel like a burden and interfere with your company’s daily operations.
At Correct Capital, we understand that 401(k) audits can be a major source of stress and are a regulatory requirement. Our team will partner with you for everything from document collection through meeting Form 5500 deadlines. Whether you're navigating your first audit in Des Moines, IA, or looking to streamline a previously cumbersome process, we're here to minimize the hassle. You can schedule a meeting with a member of our advisor team, fill out our online form, or call us at 877-930-401(k) to get started.

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What is a 401(k) Audit?
A 401(k) audit is an annual review required for Des Moines, IA companies with more than 100 eligible participants in their 401(k) plan. Note: Even if you do not have more than 100 employees actively enrolled in the plan, you are still required to have an audit if there are 100 who have the option to participate if they wanted. The audit ensures that the retirement plan complies with the regulations mandated 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, withdrawals, and operations are accurately represented.
While necessary to meet legal requirements, 401(k) audits can be challenging and time-consuming. Correct Capital helps Des Moines, IA businesses navigate these audits by helping with document collection, helping clarify compliance testing, as well as other audit processes. With the right support, getting through the audit can become a far more manageable task.
Why are 401(k) Audits Necessary for Des Moines, IA Companies?
You need to undergo a 401(k) audit for several reasons, to ensure 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: Audits ensure that your 401(k) plan adheres to all legal requirements set by the Department of Labor (DOL) and the IRS, with emphasis under the Employee Retirement Income Security Act (ERISA).
- Preventing Discrimination: The audit ensures that the plan disproportionately benefits higher-paid employees (often known as “top-heavy” testing) in order to promote the plan treats all employees fairly and equally.
- Identifying Operational Issues: Audits can uncover errors in employee contributions, withdrawals, or other aspects of plan management, allowing you to correct 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 that outlines the plan’s financial status, necessary for ensuring compliance with DOL and IRS regulations.
- Contribution Limits: The audit confirms that employer and employee contributions do not exceed IRS contribution limits, helping to avoid excess contributions that could lead to penalties.
- Fee Reasonableness: Auditors may review plan fees to confirm they are reasonable and don’t pose an excessive cost for participants. Excessive fees may prompt compliance concerns and hurt how employees' investments and savings perform.
- Fiduciary Oversight: The audit verifies that Des Moines, IA 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 in compliance with regulatory guidelines is a vital part of the audit.
Types of 401(k) Audits
There are two primary types of 401(k) Audits that Des Moines, IA employers may encounter, based on the specific details 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 more comprehensive audit necessary for most larger 401(k) plans. In a full-scope audit, the independent auditor reviews all aspects of the plan, including financial statements, conformance with Department of Labor (DOL) and IRS regulations, and participant data. The auditor evaluates supporting documentation for contributions, distributions, and other transactions to verify that everything is accurate and in compliance.
- Section 103(a)(3)(C)) Audit: Previously referred to as a "Limited Scope Audit," these are for plans with investments managed by a qualified, regulated financial institution (such as a bank or insurance company). The employer may take advantage of a limited-scope audit. In this type, the auditor is not required to audit the investment information endorsed by the financial institution, which can greatly lessen the audit’s complexity and cost. This could make it a more attractive option for some Des Moines, IA businesses, provided they meet the criteria.
The type of audit you need is determined by your plan’s particular characteristics, like the nature of its investments. At Correct Capital, we are able to assist you understand which type of audit your plan needs and help you be well-prepared for whichever process is necessary.
401(k) Audit Pain Points for Des Moines, IA Employers
While 401(k) audits must be conducted to ensure compliance, they often present significant challenges for Des Moines, IA employers, especially those running bigger 401(k) plans. Below are several common challenges that companies deal with:
- Document Collection and Management: Collecting the necessary paperwork, such as account statements, tax returns, and employee data, can be time-consuming. Employers may find it challenging to arrange and submit 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 missteps can lead to audit failures, sanctions, and expensive fixes later on.
- Discrimination Testing: Verifying that the plan doesn't favor higher earning employees requires careful compliance checks and can result in additional documentation and reporting.
- Time and Resource Demands: Audit preparation draws HR professionals, business owners, administrators, and others out of their core responsibilities, heightening pressure and shifting focus from everyday business tasks.
- Form 5500 and Timely Submissions: Many businesses face challenges when they file Form 5500 properly and punctually, which is essential to 401(k) compliance. Late submissions could cause penalties and create further issues for the company.
At Correct Capital, we understand these challenges and offer customized assistance to make the audit process in Des Moines, IA smoother. From assisting with document collection or confirming conformity with regulations, our team helps take the burden off your shoulders.
401(k) Audits for Multiple Employer Plans (MEP) and Pooled Employer Plans (PEP)
For Des Moines, IA employers looking to lower the complexity of a 401(k) audit, Multiple Employer Plans (MEP) and Pooled Employer Plans can provide solutions. These plans permit various businesses to consolidate into one 401(k) plan, often eliminating employer-specific audits.
- Multiple Employer Plans (MEP): These plans combine several unrelated employers into one 401(k) plan, reducing the cost and complexity of managing and auditing individual plans. This setup permits Des Moines, IA businesses to share the administrative responsibilities and potentially avoid the annual 401(k) audit altogether.
- Pooled Employer Plans (PEP): Introduced more recently, PEPs permit unrelated employers to join a shared 401(k) plan overseen by a pooled plan provider (PPP). This structure simplifies compliance and reduces costs, making it appealing for Des Moines, IA businesses looking to streamline their retirement offerings.
Both MEPs and PEPs can significantly reduce audit-related costs and time commitments, while ensuring regulatory compliance. Moving to one of these plans may be highly beneficial for smaller firms in Des Moines, IA, that want to provide a 401(k) but struggle with the costs and administrative burdens.
Working with the Right Des Moines, IA 401(k) Audit Team
401(k) audits can appear challenging, but selecting the proper assistance can greatly improve the process. Working with a team that has a firm grasp of both technical and practical elements of the audit process helps you avoid unnecessary delays and anxiety. Here’s why having the right experts on your side is important:
- Experience and Expertise: A highly experienced group understands the complexities of 401(k) audits, covering both full-scope and limited-scope audits. We will assist you with the documentation process and highlight areas for enhancement within your plan.
- Compliance Assurance: The right team helps you remain up to date with evolving regulations, making sure your plan complies with all required guidelines.
- Tailored Support: Every 401(k) plan is different. An experienced team will work closely with you to identify the unique needs of your plan and help you prepare 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: Getting ready for a 401(k) audit can distract you significantly from day-to-day operations. The proper team will shoulder a lot of the admin work, giving your HR and finance teams the freedom to concentrate on other tasks. Correct Capital makes the process smoother, easing the load for your internal team.
- MEPs and PEPs Expertise: For businesses participating in an MEP or PEP, while an individual plan audit is no longer necessary, you're still required to comply with all the rules and regulations, just with less administrative burdens after plan year end.
*as of March 2024
Partnering with a experienced, reliable team is essential to making sure your 401(k) audit in Des Moines, IA is as painless as possible. With Correct Capital by your side, 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 Des Moines, IA
Meeting 401(k) audit requirements is both a legal requirement and an opportunity to ensure your Des Moines, IA company's retirement plan stays advantageous to your employees. Correct Capital’s expertise in guiding Des Moines, IA businesses navigate the 401(k) audit helps ease the burden, letting you prioritize your business while preventing penalties for non-compliance.
Contact Correct Capital today to schedule a consultation and allow us to assist you ensure your audit goes smoothly and efficiently. Our team of experts will help with all aspects from document collection through to compliance checks, guaranteeing your plan is prepared for success. You can schedule a meeting with a member of our Des Moines, IA advisor team, contact us online, or call us at 877-930-401(k) to get started.