401(k) Audit Providence, RI

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401(k) Audit Services in Providence, RI. For Providence, RI businesses that offer retirement plans, navigating a 401(k) audit can feel like a daunting task. Between regulation from the Department of Labor (DOL) and IRS, organizing necessary documents, and ensuring that your plan isn’t “top-heavy”, 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 cause considerable frustration and cannot be avoided. Our team will assist you with every aspect of document collection through making sure Form 5500 is filed correctly and on time. Whether you're navigating your first audit in Providence, RI, or looking to streamline 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, 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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What is a 401(k) Audit?

A 401(k) audit is an yearly review necessary for Providence, RI 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 enrolled 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 adheres to 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 operations are accurately represented.

While required for regulatory purposes, 401(k) audits can be challenging and demanding. Correct Capital assists Providence, RI businesses navigate these audits by aiding in document collection, helping clarify compliance testing, as well as other audit processes. With an experienced team by your side, navigating the audit can become a far more manageable task.

Why are 401(k) Audits Necessary for Providence, RI Companies?

You are required to undergo a 401(k) audit for a variety of 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: 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, with emphasis 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 called “top-heavy” testing) in order to promote fairness across all participants.
  • Identifying Operational Issues: Audits can uncover errors in employee contributions, withdrawals, or additional plan operations, enabling you to resolve these issues so they don't lead to fines.
  • Filing Form 5500: The audit guarantees proper and timely submission of Form 5500, a required document detailing the plan’s financial status, necessary for ensuring compliance with DOL and IRS regulations.
  • Contribution Limits: The audit ensures that employer and employee contributions do not exceed IRS limits for the year, reducing the risk of excess contributions that might trigger penalties.
  • Fee Reasonableness: Auditors may examine plan fees to confirm they are reasonable and don’t pose an excessive cost for participants. High fees can raise compliance concerns and negatively impact the long-term growth of employee retirement savings.
  • Fiduciary Oversight: The audit confirms that Providence, RI employers are serving the interests of plan participants, fulfilling their fiduciary responsibilities as outlined in 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 Providence, RI employers could face, 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 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 verify that everything is accurate and in compliance.
  • Section 103(a)(3)(C)) Audit: Previously called 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 take advantage of a limited-scope audit. In this type, the auditor is not required to audit the investment information verified by the financial institution, which can significantly reduce the audit’s complexity and cost. This could make it a preferable choice for some Providence, RI businesses, provided they meet the criteria.

The specific audit required depends on your plan’s particular characteristics, including the nature of its investments. At Correct Capital, we are able to assist you figure out which type of audit your plan is subject to and help you be well-prepared for whichever process is necessary.

401(k) Audit Pain Points for Providence, RI Employers

While 401(k) audits are required to meet legal obligations, they frequently pose difficulties for Providence, RI employers, especially those running bigger 401(k) plans. These are some of the major issues 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 often struggle to sort through and file the necessary paperwork, especially for larger, more complex plans.
  • Compliance with Changing Regulations: Keeping pace with evolving DOL, IRS, and ERISA regulations can be challenging. Compliance oversights can cause audit failures, sanctions, and costly corrections later on.
  • Discrimination Testing: Verifying that the plan isn’t top-heavy requires careful compliance checks and can result in additional documentation and reporting.
  • Time and Resource Demands: Preparing for an audit pulls HR professionals, business owners, administrators, and others out of their core responsibilities, increasing stress and diverting attention from day-to-day operations.
  • Form 5500 and Timely Submissions: Many businesses struggle to file Form 5500 properly and punctually, which is a key component of 401(k) compliance. Failing to meet the submission date could cause penalties and cause additional problems for the company.

At Correct Capital, we are aware of the difficulties involved and provide tailored support to make the audit process in Providence, RI smoother. Whether it’s helping 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 Providence, RI employers hoping to ease the complexity of a 401(k) audit, Multiple Employer Plans (MEP) and Pooled Employer Plans (PEP) can offer relief. These plans enable different employers to consolidate into one 401(k) plan, reducing the need for employer-specific audits.

  • Multiple Employer Plans (MEP): These plans consolidate several unrelated employers into one 401(k) plan, reducing the cost and complexity of managing and auditing individual plans. This setup permits Providence, RI businesses to distribute the administrative responsibilities and possibly eliminate the annual 401(k) audit altogether.
  • Pooled Employer Plans (PEP): A more recent development, PEPs permit unrelated employers to join a shared 401(k) plan managed by a pooled plan provider (PPP). This structure streamlines the regulatory process and lowers expenses, making it attractive for Providence, RI businesses looking to streamline their retirement offerings.

Both MEPs and PEPs can significantly reduce audit-related costs and time commitments, while still ensuring compliance with federal regulations. Moving to one of these plans may be highly beneficial for smaller firms in Providence, RI, that want to provide a 401(k) but struggle with the costs and administrative burdens.

Working with the Right Providence, RI 401(k) Audit Team

401(k) audits can appear challenging, but choosing the right support can make all the difference. Collaborating with experts that is well-versed in both the technicalities and practicalities of the audit process helps you avoid unnecessary delays and anxiety. Here’s why partnering with the right experts matters:

  • Experience and Expertise: A highly experienced group understands the details 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 helps you remain up to date with evolving regulations, making sure your plan complies with all required guidelines.
  • Tailored Support: All 401(k) plans are distinct. An experienced team will partner with you to grasp 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, with more than $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: Audit preparation can take considerable time away from day-to-day operations. The proper team will take on much of the administrative burden, enabling your HR and finance teams to focus on other priorities. Correct Capital simplifies the entire 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 no longer necessary, 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 essential to making sure your 401(k) audit in Providence, RI runs efficiently and stress-free. 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 Providence, RI

Complying with 401(k) audits is both a legal requirement and an important way to confirm your Providence, RI company's retirement plan continues to offer maximum benefit to your employees. Correct Capital’s knowledge of helping Providence, RI businesses complete the 401(k) audit reduces the strain, letting you prioritize your business while avoiding fines for non-compliance.

Contact Correct Capital today to arrange a session and allow us to assist you prepare for a smooth, efficient audit. Our team of experts will support you with everything, including 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 Providence, RI advisor team, contact us online, or call us at 877-930-401(k) to begin.


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