401(k) Audit Services in Grand Rapids, MI. For Grand Rapids, MI businesses offering their employees retirement plans, navigating a 401(k) audit can feel like a daunting task. Between regulation from the Department of Labor (DOL) and IRS, gathering a large amount of paperwork, 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 can be made much easier 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 partner with you for everything from document collection to meeting Form 5500 deadlines. Whether you're preparing for your first audit in Grand Rapids, MI, or looking to streamline a process that's usually a burden, we're here to minimize the hassle. You can schedule 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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What is a 401(k) Audit?
A 401(k) audit is an annual review necessary for Grand Rapids, MI companies with more than 100 eligible participants in their 401(k) plan. Note: Even if you lack more than 100 employees actively participating in the plan, you still need an audit if there are 100 who have the option to participate if they wanted. The audit confirms that the retirement plan follows the regulations established by the Department of Labor (DOL) and the Employee Retirement Income Security Act (ERISA). It assesses the plan’s financial integrity, ensuring that employee contributions, withdrawals, and operations are faithfully recorded.
While required for regulatory purposes, 401(k) audits can be complicated and lengthy. Correct Capital supports Grand Rapids, MI businesses prepare for these audits by helping with document collection, ensuring comprehension of compliance testing, etc... With an experienced team by your side, getting through the audit can become a much easier process.
Why are 401(k) Audits Necessary for Grand Rapids, MI Companies?
You must undergo a 401(k) audit for a variety of reasons, to ensure retirement plans adhere to federal regulations and safeguard both the employer and employees. Here’s why you need them:
- Compliance with DOL and IRS Regulations: Audits ensure that your 401(k) plan adheres to all legal requirements established by the Department of Labor (DOL) and the IRS, especially 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) to guarantee fairness across all participants.
- Identifying Operational Issues: Audits can uncover errors in contributions, distributions, or additional plan operations, enabling you to resolve these issues so they don't lead to penalties.
- Filing Form 5500: The audit ensures the accurate and on-time filing of Form 5500, a yearly filing detailing the plan’s financial status, necessary for ensuring compliance with DOL and IRS regulations.
- Contribution Limits: The audit confirms that employer and employee contributions remain within IRS limits for the year, helping to avoid excess contributions that may result in penalties.
- Fee Reasonableness: Auditors may review plan fees to confirm they are reasonable and aren’t unnecessarily high for participants. Overpriced fees could lead to compliance concerns and hurt how employees' investments and savings perform.
- Fiduciary Oversight: The audit ensures that Grand Rapids, MI employers are working to benefit plan participants, fulfilling their fiduciary responsibilities as required 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 Grand Rapids, MI employers may encounter, depending on the size and complexity of their plan. These types of audits are determined by the structure of the retirement plan, as well as its investment and participant details.
- Full-Scope Audit: This is the thorough audit necessary for most larger 401(k) plans. In a full-scope audit, the third-party auditor examines every part of the plan, such as financial statements, compliance with Department of Labor (DOL) and IRS regulations, and participant data. The auditor examines supporting documentation for contributions, distributions, and other transactions to ensure accuracy and compliance.
- Section 103(a)(3)(C)) Audit: Formerly known 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 does not need to audit the investment information certified by the financial institution, which can significantly reduce the audit’s complexity and cost. This could make it a more attractive option for some Grand Rapids, MI businesses, as long as they meet the criteria.
The specific audit required depends on your plan’s particular characteristics, such as the nature of its investments. At Correct Capital, we can help you determine which type of audit your plan needs and ensure you're fully prepared for whichever process is necessary.
401(k) Audit Pain Points for Grand Rapids, MI Employers
While 401(k) audits are necessary for compliance, they frequently pose difficulties for Grand Rapids, MI employers, particularly those overseeing more substantial retirement plans. Here are some of the key pain points that businesses face:
- Document Collection and Management: Gathering the required files, such as account statements, tax returns, and employee data, can be time-consuming. Employers often struggle to organize and submit the necessary paperwork, especially for larger, more complex plans.
- Compliance with Changing Regulations: Staying up to date with changing DOL, IRS, and ERISA regulations can prove difficult. Compliance errors can lead to audit failures, penalties, and pricey amendments in the long run.
- Discrimination Testing: Making sure that the plan isn’t top-heavy 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 off of their core responsibilities, heightening pressure and shifting focus from everyday business tasks.
- 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. Missing the deadline could cause penalties and complicate things for the company.
At Correct Capital, we are aware of the difficulties involved and provide tailored support to streamline the audit procedure in Grand Rapids, MI. Be it 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 Grand Rapids, MI employers looking to lower the administrative burden of a 401(k) audit, Multiple Employer Plans (MEP) and PEPs can provide solutions. These plans permit various businesses to participate in a unified 401(k) plan, frequently removing employer-specific audits.
- Multiple Employer Plans (MEP): These plans consolidate several unrelated employers into one 401(k) plan, lowering the expenses and simplifying the management of managing and auditing individual plans. This setup permits Grand Rapids, MI businesses to divide the administrative responsibilities and potentially avoid 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 streamlines the regulatory process and lowers expenses, making it attractive for Grand Rapids, MI businesses looking to streamline their retirement offerings.
Both MEPs and PEPs can substantially decrease the costs and time required for audits, all while maintaining adherence to regulations. Transitioning into an MEP or PEP may be especially appealing to smaller businesses in Grand Rapids, MI, who want to offer a 401(k) but find the costs and paperwork challenging.
Working with the Right Grand Rapids, MI 401(k) Audit Team
401(k) audits can be daunting, but having the right team in place changes everything. Collaborating with experts that has a firm grasp of both technical and practical elements of the audit process can save you significant time and stress. Here’s why working with the right specialists is crucial:
- Experience and Expertise: A highly experienced group is knowledgeable about the nuances 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 will help you stay on top of evolving regulations, making sure your plan complies with all required guidelines.
- Tailored Support: Each 401(k) plan has unique requirements. An experienced team will partner with you to grasp the unique needs of your plan and assist you in getting ready for your specific audit requirements. Correct Capital is responsible for managing over 37 plans in both small and large companies, representing 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 consume a lot of time from day-to-day operations. The right partner will shoulder a lot of the admin work, 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 participating in an MEP or PEP, while an separate audit is no longer necessary, you're still required to comply with all the rules and regulations, though with a reduced administrative workload after plan year end.
*as of March 2024
Partnering with a well-informed, reliable team is key to ensuring your 401(k) audit in Grand Rapids, MI goes as smoothly as possible. With Correct Capital supporting you, you’ll feel secure that your audit will be conducted thoroughly and on time.
Call Correct Capital for Help With Your 401(k) Audit in Grand Rapids, MI
Complying with 401(k) audits is both a regulatory obligation and an important way to confirm your Grand Rapids, MI company's retirement plan continues to offer maximum benefit to your employees. Correct Capital’s expertise in guiding Grand Rapids, MI businesses navigate the 401(k) audit lightens the load, enabling you to concentrate on your operations while preventing penalties for non-compliance.
Contact Correct Capital today to arrange a session and allow us to assist you get ready for a streamlined, effective audit. Our team of experts will assist with everything 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 Grand Rapids, MI advisor team, contact us online, or call us at 877-930-401(k) to begin.