401(k) Audit Services in Salt Lake City, UT. For Salt Lake City, UT businesses that offer retirement plans, completing a 401(k) audit can seem like a challenging process. 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 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 interfere with your company’s daily operations.
At Correct Capital, we understand that 401(k) audits can be a major source of stress and cannot be avoided. Our team will work with you with every aspect of document collection through making sure Form 5500 is filed correctly and on time. Whether you're preparing for your first audit in Salt Lake City, UT, or looking to streamline a process that's usually a burden, we're here to ensure it’s as smooth and easy as possible. You can book 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 yearly review required for Salt Lake City, UT companies who have at least 100 eligible participants in their 401(k) plan. Note: Even if you lack 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 adheres to the regulations set by the Department of Labor (DOL) and the Employee Retirement Income Security Act (ERISA). It reviews the plan’s overall financial health, ensuring that contributions, distributions, and plan activities are properly documented.
While necessary for compliance, 401(k) audits can be challenging and time-consuming. Correct Capital supports Salt Lake City, UT businesses get ready for these audits by aiding in document collection, helping clarify compliance testing, as well as other audit processes. With an experienced team in your corner, handling the audit process can become a far more manageable task.
Why are 401(k) Audits Necessary for Salt Lake City, UT Companies?
You are required to undergo a 401(k) audit for a variety of reasons, to ensure retirement plans remain compliant with federal regulations and protect both the employer and employees. Here’s why you need them:
- Compliance with DOL and IRS Regulations: Audits ensure that your 401(k) plan follows all legal requirements mandated by the Department of Labor (DOL) and the IRS, with emphasis under the Employee Retirement Income Security Act (ERISA).
- Preventing Discrimination: The audit checks if the plan isn't overly advantageous to higher-paid employees (often referred to as “top-heavy” testing) to guarantee fairness across all participants.
- Identifying Operational Issues: Audits can uncover errors in contributions, distributions, or other facets of plan oversight, enabling you to resolve these issues so they don't lead to penalties.
- Filing Form 5500: The audit guarantees proper and timely submission of Form 5500, a required document detailing the plan’s financial status, needed to uphold compliance with DOL and IRS regulations.
- Contribution Limits: The audit confirms that employer and employee contributions remain within IRS limits for the year, preventing excess contributions that could lead to penalties.
- Fee Reasonableness: Auditors may review plan fees to verify they are reasonable and aren’t unnecessarily high for participants. Excessive fees may prompt compliance concerns and affect how employees' investments and savings perform.
- Fiduciary Oversight: The audit confirms that Salt Lake City, UT 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 aligned with regulatory guidelines is a critical part of the audit.
Types of 401(k) Audits
There are two kinds of 401(k) audits that Salt Lake City, UT employers could face, depending on the size and complexity 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 required for most larger 401(k) plans. In a full-scope audit, the third-party auditor evaluates all components of the plan, which includes financial statements, conformance with Department of Labor (DOL) and IRS regulations, and participant data. The auditor examines supporting documentation for contributions, withdrawls, and other transactions to verify that everything is accurate and in compliance.
- Section 103(a)(3)(C)) Audit: Previously referred to as a "Limited Scope Audit," these pertain to plans with investments managed 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 is not obligated 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 better alternative for some Salt Lake City, UT businesses, provided they meet the criteria.
The specific audit required is based on your plan’s particular characteristics, including the nature of its investments. At Correct Capital, we will guide you to figure out which type of audit your plan requires and make sure you're ready for whichever process is necessary.
401(k) Audit Pain Points for Salt Lake City, UT Employers
While 401(k) audits must be conducted to ensure compliance, they can create major obstacles for Salt Lake City, UT employers, notably those managing larger plans. These are some of the major issues that companies deal with:
- Document Collection and Management: Assembling the right documents, such as account statements, tax returns, and employee data, can be time-consuming. Employers often struggle to organize and file the necessary paperwork, especially for larger, more complex plans.
- Compliance with Changing Regulations: Keeping pace with changing DOL, IRS, and ERISA regulations is difficult. Compliance errors can cause audit failures, fines, and expensive fixes later on.
- Discrimination Testing: Verifying that the plan doesn't favor higher earning employees involves detailed compliance reviews and can lead to additional documentation and reporting.
- Time and Resource Demands: Getting ready for an audit takes HR professionals, business owners, administrators, and others out of their core responsibilities, adding strain and distracting them from everyday business tasks.
- Form 5500 and Timely Submissions: Many businesses face challenges when they file Form 5500 properly and punctually, which plays a critical role in 401(k) compliance. Missing the deadline could cause penalties and complicate things for the company.
At Correct Capital, we recognize these obstacles and deliver personalized help to make the audit process in Salt Lake City, UT less stressful. Be it document collection or ensuring compliance 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 Salt Lake City, UT employers looking to lower the workload of a 401(k) audit, Multiple Employer Plans (MEP) and PEPs can ease the process. These plans permit various businesses to participate in a unified 401(k) plan, reducing the need for employer-specific audits.
- Multiple Employer Plans (MEP): These plans combine several unrelated employers into one 401(k) plan, lowering the expenses and simplifying the management of managing and auditing individual plans. This setup enables Salt Lake City, UT businesses to distribute the administrative responsibilities and often sidestep the annual 401(k) audit altogether.
- Pooled Employer Plans (PEP): Recently established, PEPs allow unrelated employers to enter a unified 401(k) plan overseen by a pooled plan provider (PPP). This structure makes meeting regulations easier and lowers expenses, making it appealing for Salt Lake City, UT businesses looking to streamline their retirement offerings.
Both MEPs and PEPs can significantly reduce audit-related costs and time commitments, all while maintaining adherence to regulations. Switching to these types of plans may be particularly attractive for small companies in Salt Lake City, UT, who wish to provide a 401(k) plan but are overwhelmed by costs and admin tasks.
Working with the Right Salt Lake City, UT 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 helps you avoid unnecessary delays and anxiety. Here’s why working with the right specialists is crucial:
- Experience and Expertise: A team of experts will be familiar with the details 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 work closely with you to identify 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, which allows us to understand the nuances of any company 401(k) plan.
- Saving Time and Resources: Audit preparation can distract you significantly from day-to-day operations. The ideal support will shoulder a lot of the admin work, giving your HR and finance teams to focus on other priorities. Correct Capital helps streamline the process, easing the load for your internal team.
- MEPs and PEPs Expertise: For businesses participating in an MEP or PEP, while an individual plan audit is no longer mandated, you're still obligated to adhere to all the rules and regulations, just with less administrative burdens after plan year end.
*as of March 2024
Partnering with a knowledgeable, reliable team is key to ensuring your 401(k) audit in Salt Lake City, UT is as painless as possible. 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 Salt Lake City, UT
Adhering to 401(k) audit regulations is both a regulatory obligation and an important way to confirm your Salt Lake City, UT company's retirement plan continues to offer maximum benefit to your employees. Correct Capital’s expertise in guiding Salt Lake City, UT businesses complete the 401(k) audit lightens the load, letting you prioritize your business while preventing penalties for non-compliance.
Contact Correct Capital today to arrange a session and allow us to assist you ensure your audit goes smoothly and efficiently. Our team of experts will support you with everything, including document collection to compliance checks, guaranteeing your plan is prepared for success. You can schedule a meeting with a member of our Salt Lake City, UT advisor team, contact us online, or call us at 877-930-401(k) to start the process.