401(k) Audit Santa Rosa, CA

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401(k) Audit Services in Santa Rosa, CA. For Santa Rosa, CA businesses offering their employees retirement plans, navigating a 401(k) audit can feel like an uphill battle. Between compliance requirements from the Department of Labor (DOL) and IRS, collecting extensive documentation, and ensuring that your plan isn’t “top-heavy”, it can be overwhelming. However, with the right support, the 401(k) audit can be made much easier and affect your daily business activities.

At Correct Capital, we understand that 401(k) audits can create significant headaches and are a regulatory requirement. Our team will assist you with every aspect of document collection through meeting Form 5500 deadlines. Whether you're preparing for your first audit in Santa Rosa, CA, or hoping to optimize a previously cumbersome process, we're here to ensure it’s as smooth and easy as possible. You can schedule 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 Santa Rosa, CA companies with 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 must still undergo 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 established 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, withdrawals, and operations are faithfully recorded.

While necessary to meet legal requirements, 401(k) audits can be complex and demanding. Correct Capital supports Santa Rosa, CA businesses prepare for these audits by aiding in document collection, assisting with understanding compliance testing, as well as other audit processes. With an experienced team in your corner, navigating the audit can become a far more manageable task.

Why are 401(k) Audits Necessary for Santa Rosa, CA Companies?

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

  • Compliance with DOL and IRS Regulations: The purpose of audits is to confirm that your 401(k) plan complies with all legal requirements established by the Department of Labor (DOL) and the IRS, especially under the Employee Retirement Income Security Act (ERISA).
  • Preventing Discrimination: The audit checks if the plan disproportionately benefits higher-paid employees (often known as “top-heavy” testing) to guarantee fairness across all participants.
  • Identifying Operational Issues: Audits may reveal errors in employee contributions, distributions, or other aspects of plan management, allowing you to correct these issues so they don't lead to fines.
  • Filing Form 5500: The audit guarantees the accurate and on-time filing of Form 5500, a required document summarizing the plan’s financial status, which is required to maintain compliance with DOL and IRS regulations.
  • Contribution Limits: The audit confirms that employer and employee contributions do not exceed IRS contribution limits, helping to avoid excess contributions that may result in penalties.
  • Fee Reasonableness: Auditors may review plan fees to confirm they are reasonable and not overly expensive for participants. High fees can raise compliance concerns and negatively impact how employees' investments and savings perform.
  • Fiduciary Oversight: The audit verifies that Santa Rosa, CA employers are acting in the best interest of plan participants, fulfilling their fiduciary responsibilities as required by ERISA.
  • Verification of Plan Documentation: Verifying 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 Santa Rosa, CA employers may encounter, depending on factors such as the size and nature 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 thorough audit necessary for most larger 401(k) plans. In a full-scope audit, the independent auditor evaluates all components of the plan, which includes 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 ensure accuracy and compliance.
  • Section 103(a)(3)(C)) Audit: Previously referred to 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 take advantage of a limited-scope audit. In this type, the auditor is not required to audit the investment information certified by the financial institution, which can greatly lessen the audit’s complexity and cost. This may make it a better alternative for some Santa Rosa, CA businesses, provided they meet the criteria.

The type of audit you need is based on your plan’s particular characteristics, such as the nature of its investments. At Correct Capital, we are able to assist you determine which type of audit your plan requires and make sure you're ready for either process.

401(k) Audit Pain Points for Santa Rosa, CA Employers

While 401(k) audits are necessary for compliance, they often present significant challenges for Santa Rosa, CA employers, especially those offering bigger 401(k) plans. Here are some of the key pain points that businesses face:

  • Document Collection and Management: Collecting the required files, such as account statements, tax returns, and employee data, can be labor-intensive. Employers may find it challenging to organize and file the necessary paperwork, especially for larger, more complex plans.
  • Compliance with Changing Regulations: Staying up to date with changing DOL, IRS, and ERISA regulations can be challenging. Compliance errors can result in audit failures, fines, and expensive fixes down the line.
  • Discrimination Testing: Ensuring that the plan isn’t top-heavy 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 off of their core responsibilities, adding strain and diverting attention from regular business activities.
  • Form 5500 and Timely Submissions: Many businesses face challenges when they file Form 5500 properly and punctually, which is essential to 401(k) compliance. Late submissions may lead to penalties and complicate things for the company.

At Correct Capital, we recognize these obstacles and deliver personalized help to streamline the audit procedure in Santa Rosa, CA. 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 Santa Rosa, CA employers hoping to ease the workload of a 401(k) audit, Multiple Employer Plans (MEP) and PEPs can offer relief. These plans permit various businesses to join a single 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, reducing the cost and complexity of managing and auditing individual plans. This setup permits Santa Rosa, CA businesses to distribute the administrative responsibilities and often sidestep the annual 401(k) audit altogether.
  • Pooled Employer Plans (PEP): A more recent development, PEPs enable unrelated employers to participate in a collective 401(k) plan overseen by a pooled plan provider (PPP). This structure makes meeting regulations easier and cuts costs, making it a desirable option for Santa Rosa, CA businesses looking to streamline 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. Switching to these types of plans may be highly beneficial for smaller firms in Santa Rosa, CA, who wish to provide a 401(k) plan but are overwhelmed by costs and admin tasks.

Working with the Right Santa Rosa, CA 401(k) Audit Team

401(k) audits can appear challenging, but selecting the proper assistance can greatly improve the process. Collaborating with experts that has a firm grasp of both technical and practical elements of the audit process can save you significant time and stress. Here’s why working with the right specialists is crucial:

  • Experience and Expertise: A team of experts is knowledgeable about the nuances of 401(k) audits, including both 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, confirming your plan adheres to all regulations.
  • Tailored Support: Every 401(k) plan is different. 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 is responsible for managing 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: Preparing for a 401(k) audit can consume a lot of time from day-to-day operations. The right partner will handle most of the administrative tasks, enabling your HR and finance teams to focus on other priorities. Correct Capital helps streamline the process, taking the stress off your internal team.
  • MEPs and PEPs Expertise: For businesses in a Multiple Employer Plan (MEP) or Pooled Employer Plan (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

Collaborating with a well-informed, reliable team is essential to making sure your 401(k) audit in Santa Rosa, CA goes as smoothly as possible. With Correct Capital supporting you, you’ll be assured that your audit will be conducted thoroughly and on time.

Call Correct Capital for Help With Your 401(k) Audit in Santa Rosa, CA

Meeting 401(k) audit requirements is both a legal requirement and an important way to confirm your Santa Rosa, CA company's retirement plan remains as beneficial as possible to your employees. Correct Capital’s experience in assisting Santa Rosa, CA businesses through the 401(k) audit reduces the strain, enabling you to concentrate on your operations while avoiding fines for non-compliance.

Contact Correct Capital today to arrange a session and we'll guide you ensure your audit goes smoothly and efficiently. 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 Santa Rosa, CA advisor team, contact us online, or call us at 877-930-401(k) to get started.


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