401(k) Audit Services in Omaha, NE. For Omaha, NE businesses that offer retirement plans, completing a 401(k) audit can feel like a challenging process. Between regulation from the Department of Labor (DOL) and IRS, organizing necessary documents, and ensuring that your plan isn’t “top-heavy”, there is a lot to keep track of. However, with the right support, the 401(k) audit does not need to disrupt your business and interfere with your company’s daily operations.
At Correct Capital, we understand that 401(k) audits can create significant headaches even though they cannot be avoided. Our team will assist you for everything from document collection to making sure Form 5500 is filed correctly and on time. Whether you're preparing for your first audit in Omaha, NE, or hoping to optimize a process that's usually a burden, 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, fill out our online form, 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 yearly review mandated for Omaha, NE companies who have at least 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 verifies that the retirement plan follows 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 contributions, withdrawals, and plan activities are accurately represented.
While necessary to meet legal requirements, 401(k) audits can be challenging and time-consuming. Correct Capital helps Omaha, NE businesses navigate these audits by assisting with document collection, ensuring comprehension of compliance testing, and other related tasks. With an experienced team in your corner, getting through the audit can become a far more manageable task.
Why are 401(k) Audits Necessary for Omaha, NE Companies?
You are required to undergo a 401(k) audit for a variety of 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 adheres to all legal requirements established by the Department of Labor (DOL) and the IRS, particularly 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) to guarantee the plan treats all employees fairly and equally.
- Identifying Operational Issues: Audits may reveal errors in employee contributions, withdrawals, or other aspects of plan management, enabling you to resolve these issues before they result in fines.
- Filing Form 5500: The audit confirms proper and timely submission of Form 5500, an annual report detailing the plan’s financial status, which is required to maintain 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 might trigger penalties.
- Fee Reasonableness: Auditors may examine plan fees to verify they are reasonable and not overly expensive for participants. High fees can raise compliance concerns and affect the long-term growth of employee retirement savings.
- Fiduciary Oversight: The audit verifies that Omaha, NE employers are serving the interests of plan participants, meeting 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 one of the most important parts of the audit.
Types of 401(k) Audits
There are two primary types of 401(k) Audits that Omaha, NE employers may encounter, 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 external auditor examines every part of the plan, including 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 confirm correctness and adherence to regulations.
- Section 103(a)(3)(C)) Audit: Previously called a "Limited Scope Audit," these apply to plans with investments overseen 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 obligated 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 better alternative for some Omaha, NE 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 is subject to and help you be well-prepared for both audit types.
401(k) Audit Pain Points for Omaha, NE Employers
While 401(k) audits are necessary for compliance, they can create major obstacles for Omaha, NE employers, notably those overseeing more substantial retirement plans. These are some of the major issues that employers encounter:
- Document Collection and Management: Assembling the necessary paperwork, such as account statements, tax returns, and employee data, can be labor-intensive. Employers often struggle to organize and submit the necessary paperwork, especially for larger, more complex plans.
- Compliance with Changing Regulations: Remaining compliant with shifting DOL, IRS, and ERISA regulations can be challenging. Compliance missteps can result in audit failures, fines, and costly corrections in the long run.
- Discrimination Testing: Ensuring 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: Getting ready for an audit takes HR professionals, business owners, administrators, and others away from their core responsibilities, adding strain and distracting them from everyday business tasks.
- Form 5500 and Timely Submissions: Many businesses struggle to file Form 5500 properly and punctually, which is essential to 401(k) compliance. Failing to meet the submission date may lead to 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 Omaha, NE smoother. Whether it’s helping with document collection or confirming conformity with 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 Omaha, NE employers seeking to reduce the administrative burden of a 401(k) audit, Multiple Employer Plans (MEP) and PEPs can provide solutions. These plans permit various businesses to join a single 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 enables Omaha, NE businesses to distribute the administrative responsibilities and possibly eliminate the annual 401(k) audit altogether.
- Pooled Employer Plans (PEP): Recently established, PEPs enable unrelated employers to participate in a collective 401(k) plan administered by a pooled plan provider (PPP). This structure makes meeting regulations easier and reduces costs, making it a desirable option for Omaha, NE businesses seeking to simplify their retirement offerings.
Both MEPs and PEPs can substantially decrease the costs and time required for audits, all while maintaining adherence to regulations. Moving to one of these plans may be particularly attractive for small companies in Omaha, NE, who want to offer a 401(k) but find the costs and paperwork challenging.
Working with the Right Omaha, NE 401(k) Audit Team
401(k) audits can be daunting, but choosing the right support changes everything. Collaborating with experts that is well-versed in both the technicalities and practicalities of the audit process can save you significant time and stress. Here’s why partnering with the right experts matters:
- Experience and Expertise: A skilled team will be familiar with the nuances of 401(k) audits, encompassing full-scope and limited-scope audits. We help you navigate the documentation process and help identify areas of improvement within your plan.
- Compliance Assurance: The right team will help you stay on top of evolving regulations, confirming your plan adheres to all regulations.
- Tailored Support: All 401(k) plans are distinct. An experienced team will partner with you to identify 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, and represents over $212 million in total plan assets across the United States, giving us the expertise to handle any company 401(k) plan.
- Saving Time and Resources: Preparing for a 401(k) audit can take considerable time away from day-to-day operations. The right partner will shoulder a lot of the admin work, allowing your HR and finance teams the freedom to concentrate on other tasks. Correct Capital helps streamline the process, taking the stress off your internal team.
- MEPs and PEPs Expertise: For businesses participating in an MEP or PEP, while an individual plan audit is not required, you're still responsible for following 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 crucial for guaranteeing your 401(k) audit in Omaha, NE goes as smoothly as possible. With Correct Capital by your side, 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 Omaha, NE
Complying with 401(k) audits is both a legal requirement and an opportunity to verify your Omaha, NE company's retirement plan continues to offer maximum benefit to your employees. Correct Capital’s knowledge of helping Omaha, NE businesses through 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 we'll guide you prepare for a smooth, efficient audit. Our team of experts will assist with everything from document collection to compliance checks, ensuring your plan is fully optimized. You can schedule a meeting with a member of our Omaha, NE advisor team, contact us online, or call us at 877-930-401(k) to begin.
