401(k) Audit Services in Greensboro, NC. For Greensboro, NC businesses offering their employees retirement plans, navigating a 401(k) audit can seem like a daunting task. Between compliance requirements 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, it can be overwhelming. However, with the right support, the 401(k) audit doesn’t have to feel like a burden and disrupt your day-to-day operations.
At Correct Capital, we understand that 401(k) audits can cause considerable frustration and cannot be avoided. Our team will partner with you for everything from document collection to meeting Form 5500 deadlines. Whether you're getting ready for your initial audit in Greensboro, NC, or looking to streamline a previously cumbersome process, we're here to make it as simple and stress-free as possible. You can ask for 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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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
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About 401(k) Audits
A 401(k) audit is an annual review necessary for Greensboro, NC companies with more than 100 eligible participants in their 401(k) plan. Note: Even if you don’t have more than 100 employees actively contributing to the plan, you are still required to have an audit if there are 100 who are eligible. The audit confirms that the retirement plan complies with the regulations mandated by the Department of Labor (DOL) and the Employee Retirement Income Security Act (ERISA). It evaluates the plan’s overall financial health, ensuring that employee contributions, withdrawals, and plan activities are faithfully recorded.
While required for regulatory purposes, 401(k) audits can be complicated and time-consuming. Correct Capital supports Greensboro, NC businesses get ready for these audits by assisting with document collection, helping clarify compliance testing, and other related tasks. With the right support, getting through the audit can become a much easier process.
Why are 401(k) Audits Necessary for Greensboro, NC Companies?
You must undergo a 401(k) audit for several reasons, to ensure retirement plans adhere to federal regulations and safeguard both the employer and employees. Here’s why they are required:
- Compliance with DOL and IRS Regulations: A 401(k) audit guarantees that your 401(k) plan adheres to all legal requirements set 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 isn't overly advantageous to higher-paid employees (often referred to as “top-heavy” testing) to ensure fairness across all participants.
- Identifying Operational Issues: Audits may reveal errors in contributions, withdrawals, or additional plan operations, enabling you to resolve these issues so they don't lead to penalties.
- Filing Form 5500: The audit guarantees the accurate and on-time filing of Form 5500, a required document that outlines the plan’s financial status, needed to uphold compliance with DOL and IRS regulations.
- Contribution Limits: The audit ensures that employer and employee contributions do not exceed IRS contribution limits, preventing excess contributions that might trigger penalties.
- Fee Reasonableness: Auditors may examine plan fees to verify they are reasonable and not overly expensive for participants. Excessive fees may prompt compliance concerns and hurt the long-term growth of employee retirement savings.
- Fiduciary Oversight: The audit confirms that Greensboro, NC employers are serving the interests of plan participants, meeting their fiduciary responsibilities as outlined in ERISA.
- Verification of Plan Documentation: Confirming that the plan's documents, policies, and operational practices are in compliance with regulatory guidelines is one of the most important parts of the audit.
Types of 401(k) Audits
There are two kinds of 401(k) audits that Greensboro, NC employers might come across, 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 most detailed audit necessary for most larger 401(k) plans. In a full-scope audit, the external auditor evaluates all components of the plan, including financial statements, adherence to Department of Labor (DOL) and IRS regulations, and participant data. The auditor evaluates supporting documentation for contributions, distributions, and other transactions to confirm correctness and adherence to regulations.
- Section 103(a)(3)(C)) Audit: Formerly known as a "Limited Scope Audit," these apply to plans with investments managed by a qualified, regulated financial institution (such as a bank or insurance company). The employer may qualify for 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 may make it a more attractive option for some Greensboro, NC businesses, provided they meet the criteria.
The type of audit you need depends on your plan’s specific details, such as the nature of its investments. At Correct Capital, we will guide you to understand which type of audit your plan needs and make sure you're ready for both audit types.
401(k) Audit Pain Points for Greensboro, NC Employers
While 401(k) audits are necessary for compliance, they often present significant challenges for Greensboro, NC employers, particularly those offering bigger 401(k) plans. Here are some of the key pain points that employers encounter:
- Document Collection and Management: Gathering the required files, such as account statements, tax returns, and employee data, can be labor-intensive. Employers frequently have difficulties to organize 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 errors can result in audit failures, fines, and expensive fixes in the long run.
- Discrimination Testing: Making sure that the plan doesn't favor higher earning employees demands thorough checks for compliance and can lead to additional documentation and reporting.
- Time and Resource Demands: Audit preparation draws HR professionals, business owners, administrators, and others off of their core responsibilities, increasing stress and diverting attention from everyday business tasks.
- Form 5500 and Timely Submissions: Many businesses struggle to file Form 5500 accurately and on time, which is a key component of 401(k) compliance. Late submissions can result in penalties and create further issues for the company.
At Correct Capital, we are aware of the difficulties involved and provide tailored support to streamline the audit procedure in Greensboro, NC. 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 Greensboro, NC employers hoping to ease the administrative burden 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, 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 Greensboro, NC businesses to divide 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 streamlines the regulatory process and lowers expenses, making it attractive for Greensboro, NC businesses looking to streamline their retirement offerings.
Both MEPs and PEPs can dramatically cut down the expenses and time involved in audits, all while maintaining adherence to regulations. Transitioning into an MEP or PEP may be particularly attractive for small companies in Greensboro, NC, who want to offer a 401(k) but find the costs and paperwork challenging.
Working with the Right Greensboro, NC 401(k) Audit Team
401(k) audits can be daunting, but choosing the right support can make all the difference. Partnering with professionals 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 partnering with the right experts matters:
- Experience and Expertise: A team of experts understands the nuances of 401(k) audits, encompassing 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 ensures you keep up with evolving regulations, ensuring that your plan meets all necessary standards.
- Tailored Support: All 401(k) plans are distinct. An experienced team will partner with you to understand the unique needs of your plan and guide you in preparing for your specific audit requirements. Correct Capital currently manages over 37 plans in both small and large companies, and represents over $212 million in total plan assets across the United States, which allows us to understand the nuances of any company 401(k) plan.
- Saving Time and Resources: Preparing for a 401(k) audit can consume a lot of time from day-to-day operations. The ideal support will handle most of the administrative tasks, enabling your HR and finance teams to focus on other priorities. Correct Capital makes the process smoother, taking the stress off your internal team.
- MEPs and PEPs Expertise: For businesses enrolled in an MEP or PEP, while an audit specific to your plan is not required, you're still responsible for following 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 Greensboro, NC goes as smoothly as possible. With Correct Capital supporting you, you’ll have the confidence that your audit will be handled with precision and care.
Call Correct Capital for Help With Your 401(k) Audit in Greensboro, NC
Adhering to 401(k) audit regulations is both a legal requirement and an important way to confirm your Greensboro, NC company's retirement plan remains as beneficial as possible to your employees. Correct Capital’s expertise in guiding Greensboro, NC businesses complete the 401(k) audit helps ease the burden, allowing you to focus on your business while ensuring you're not penalized for non-compliance.
Contact Correct Capital today to arrange a session and let us help you get ready for a streamlined, effective audit. Our team of experts will support you with everything, including document collection through to compliance checks, ensuring your plan is fully optimized. You can schedule a meeting with a member of our Greensboro, NC advisor team, contact us online, or call us at 877-930-401(k) to begin.
