401(k) Audit Services in Irving, TX. For Irving, TX businesses that offer retirement plans, navigating 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 favor higher-paid employees, there is a lot to keep track of. 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 be a major source of stress and cannot be avoided. Our team will partner with you for everything from document collection through meeting Form 5500 deadlines. Whether you're preparing for your first audit in Irving, TX, or looking to streamline a previously cumbersome process, we're here to ensure it’s as smooth and easy as possible. You can ask for 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 Irving, TX companies who have more than 100 eligible participants in their 401(k) plan. Note: Even if you do not have more than 100 employees actively participating 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 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 reviews the plan’s overall financial health, ensuring that employee contributions, distributions, and plan activities are accurately represented.

While necessary for compliance, 401(k) audits can be complicated and demanding. Correct Capital assists Irving, TX businesses prepare for these audits by assisting with document collection, assisting with understanding compliance testing, and other related tasks. With an experienced team by your side, navigating the audit can become a far more manageable task.

Why are 401(k) Audits Necessary for Irving, TX Companies?

You need to undergo a 401(k) audit for several reasons, ensuring that retirement plans adhere to federal regulations and protect both the employer and employees. Here’s why they are necessary:

  • Compliance with DOL and IRS Regulations: A 401(k) audit guarantees that your 401(k) plan follows all legal requirements mandated by the Department of Labor (DOL) and the IRS, especially under the Employee Retirement Income Security Act (ERISA).
  • Preventing Discrimination: The audit verifies whether the plan disproportionately benefits 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, withdrawals, or other aspects of plan management, enabling you to resolve these issues to avoid fines.
  • Filing Form 5500: The audit guarantees the accurate and on-time filing of Form 5500, an annual report summarizing the plan’s financial status, needed to uphold compliance with DOL and IRS regulations.
  • Contribution Limits: The audit verifies that employer and employee contributions remain within IRS limits for the year, reducing the risk of excess contributions that might trigger penalties.
  • Fee Reasonableness: Auditors may evaluate plan fees to confirm they are reasonable and don’t pose an excessive cost for participants. Overpriced fees could lead to compliance concerns and affect how employees' investments and savings perform.
  • Fiduciary Oversight: The audit verifies that Irving, TX employers are serving the interests of plan participants, fulfilling their fiduciary responsibilities as required by ERISA.
  • Verification of Plan Documentation: Ensuring that the plan's documents, policies, and operational practices are in compliance with regulatory guidelines is a key part of the audit.

Types of 401(k) Audits

There are two primary types of 401(k) Audits that Irving, TX employers might come across, based on the specific details 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 most detailed audit required for most larger 401(k) plans. In a full-scope audit, the external auditor reviews all aspects of the plan, including financial statements, compliance with Department of Labor (DOL) and IRS regulations, and participant data. The auditor reviews supporting documentation for contributions, distributions, and other transactions to verify that everything is accurate and in compliance.
  • Section 103(a)(3)(C)) Audit: Formerly known 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 does not need to audit the investment information certified by the financial institution, which can greatly lessen the audit’s complexity and cost. This can make it a more attractive option for some Irving, TX businesses, if they satisfy the criteria.

The kind of audit your plan needs is based on your plan’s unique features, like the nature of its investments. At Correct Capital, we will guide you to determine which type of audit your plan requires and help you be well-prepared for whichever process is necessary.

401(k) Audit Pain Points for Irving, TX Employers

While 401(k) audits are required to meet legal obligations, they can create major obstacles for Irving, TX employers, especially those overseeing more substantial retirement plans. Here are some of the key pain points that businesses face:

  • Document Collection and Management: Assembling the required files, such as account statements, tax returns, and employee data, can be labor-intensive. Employers may find it challenging to sort through and file the necessary paperwork, particularly with larger, more complex plans.
  • Compliance with Changing Regulations: Remaining compliant with evolving DOL, IRS, and ERISA regulations is difficult. Compliance missteps can cause audit failures, fines, and expensive fixes in the long run.
  • Discrimination Testing: Making sure that the plan doesn't favor higher earning employees involves detailed compliance reviews and can result in additional documentation and reporting.
  • Time and Resource Demands: Getting ready for an audit takes HR professionals, business owners, administrators, and others away from their core responsibilities, increasing stress and diverting attention from everyday business tasks.
  • Form 5500 and Timely Submissions: Many businesses have difficulty with file Form 5500 correctly and before the deadline, which is essential to 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 deliver personalized help to streamline the audit procedure in Irving, TX. From assisting with 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 Irving, TX employers seeking to reduce the administrative burden of a 401(k) audit, Multiple Employer Plans (MEP) and Pooled Employer Plans can provide solutions. These plans allow unrelated employers to participate in a unified 401(k) plan, frequently removing 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 enables Irving, TX businesses to distribute the administrative responsibilities and often sidestep the annual 401(k) audit altogether.
  • Pooled Employer Plans (PEP): A more recent development, PEPs allow unrelated employers to participate in a collective 401(k) plan administered by a pooled plan provider (PPP). This structure streamlines the regulatory process and lowers expenses, making it a desirable option for Irving, TX businesses seeking to simplify their retirement offerings.

Both MEPs and PEPs can dramatically cut down the expenses and time involved in audits, while still ensuring compliance with federal regulations. Moving to one of these plans may be especially appealing to smaller businesses in Irving, TX, who want to offer a 401(k) but find the costs and paperwork challenging.

Working with the Right Irving, TX 401(k) Audit Team

401(k) audits can appear challenging, but choosing the right support changes everything. Partnering with professionals that is well-versed in both the technicalities and practicalities 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 highly experienced group understands the nuances of 401(k) audits, including both full-scope and limited-scope audits. We help you navigate the documentation process and highlight areas for enhancement within your plan.
  • Compliance Assurance: The right team ensures you keep up with evolving regulations, making sure your plan complies with all required guidelines.
  • Tailored Support: All 401(k) plans are distinct. An experienced team will collaborate with you to grasp the unique needs of your plan and assist you in getting ready for your specific audit requirements. Correct Capital currently manages over 37 plans in both small and large companies, with more than $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: Getting ready for a 401(k) audit can take considerable time away from day-to-day operations. The proper team will handle most of the administrative tasks, enabling your HR and finance teams the ability to address other important matters. Correct Capital makes the process smoother, reducing the pressure on your internal team.
  • MEPs and PEPs Expertise: For businesses participating in an MEP or PEP, while an audit specific to your plan is no longer mandated, you're still obligated to adhere to all the rules and regulations, but with fewer administrative responsibilities after plan year end.

*as of March 2024

Collaborating with a knowledgeable, reliable team is crucial for guaranteeing your 401(k) audit in Irving, TX runs efficiently and stress-free. With Correct Capital by your side, 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 Irving, TX

Adhering to 401(k) audit regulations is both a regulatory obligation and an important way to confirm your Irving, TX company's retirement plan continues to offer maximum benefit to your employees. Correct Capital’s knowledge of helping Irving, TX businesses through the 401(k) audit lightens the load, enabling you to concentrate on your operations while ensuring you're not penalized 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 help with all aspects from document collection through to compliance checks, making sure your plan is set up for success. You can schedule a meeting with a member of our Irving, TX advisor team, contact us online, or call us at 877-930-401(k) to get started.


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