401(k) Audit Services in Savannah, GA. For Savannah, GA businesses that offer retirement plans, navigating a 401(k) audit can feel 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 isn’t “top-heavy”, 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 affect your daily business activities.
At Correct Capital, we understand that 401(k) audits can create significant headaches and are mandatory. 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 preparing for your first audit in Savannah, GA, or hoping to optimize a process that's usually a burden, 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, contact us online, or call us at 877-930-401(k) to get started.
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About 401(k) Audits
A 401(k) audit is an annual review required for Savannah, GA companies with at least 100 eligible participants in their 401(k) plan. Note: Even if you don’t have more than 100 employees actively enrolled in the plan, you are still required to have an audit if there are 100 who are eligible. The audit ensures 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 contributions, distributions, and plan activities are accurately represented.
While required for regulatory purposes, 401(k) audits can be challenging and lengthy. Correct Capital assists Savannah, GA businesses prepare for these audits by aiding in document collection, helping clarify compliance testing, etc... With an experienced team by your side, getting through the audit can become a much easier process.
Why are 401(k) Audits Necessary for Savannah, GA Companies?
You must undergo a 401(k) audit for a variety of reasons, ensuring that 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: A 401(k) audit guarantees that your 401(k) plan complies with all legal requirements mandated 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 fairness across all participants.
- Identifying Operational Issues: Audits can uncover errors in contributions, distributions, or additional plan operations, 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, 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 stay within IRS contribution limits, helping to avoid excess contributions that could lead to 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 hurt the long-term growth of employee retirement savings.
- Fiduciary Oversight: The audit ensures that Savannah, GA employers are acting in the best interest of plan participants, meeting their fiduciary responsibilities as mandated by ERISA.
- Verification of Plan Documentation: Confirming 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 Savannah, GA employers could face, based on the specific details 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 examines every part of the plan, such as financial statements, conformance with Department of Labor (DOL) and IRS regulations, and participant data. The auditor examines supporting documentation for contributions, distributions, and other transactions to confirm correctness and adherence to regulations.
- Section 103(a)(3)(C)) Audit: Previously called a "Limited Scope Audit," these are for 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 is not obligated to audit the investment information endorsed by the financial institution, which can greatly lessen the audit’s complexity and cost. This can make it a better alternative for some Savannah, GA businesses, if they satisfy the criteria.
The type of audit you need is based on your plan’s particular characteristics, including the nature of its investments. At Correct Capital, we can help you figure out which type of audit your plan needs and ensure you're fully prepared for both audit types.
401(k) Audit Pain Points for Savannah, GA Employers
While 401(k) audits are necessary for compliance, they often present significant challenges for Savannah, GA employers, especially those running bigger 401(k) plans. Below are several common challenges that employers encounter:
- Document Collection and Management: Collecting the necessary paperwork, such as account statements, tax returns, and employee data, can be time-consuming. Employers frequently have difficulties to sort through and deliver the necessary paperwork, notably in the case of larger, more complex plans.
- Compliance with Changing Regulations: Remaining compliant with evolving DOL, IRS, and ERISA regulations is difficult. Compliance oversights can cause audit failures, fines, and expensive fixes later on.
- Discrimination Testing: Ensuring that the plan isn’t top-heavy involves detailed compliance reviews and can necessitate additional documentation and reporting.
- Time and Resource Demands: Getting ready for an audit pulls HR professionals, business owners, administrators, and others off of their core responsibilities, adding strain and distracting them from regular business activities.
- Form 5500 and Timely Submissions: Many businesses face challenges when they file Form 5500 correctly and before the deadline, which is essential to 401(k) compliance. Failing to meet the submission date could cause penalties and complicate things for the company.
At Correct Capital, we recognize these obstacles and offer customized assistance to make the audit process in Savannah, GA more efficient. Be it document collection or confirming conformity with regulations, our team helps take the burden off your shoulders.
401(k) Audits for Multiple Employer Plans (MEP) and Pooled Employer Plans (PEP)
For Savannah, GA employers hoping to ease the workload of a 401(k) audit, Multiple Employer Plans (MEP) and Pooled Employer Plans (PEP) can offer relief. These plans allow unrelated employers to join a single 401(k) plan, often eliminating 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 allows Savannah, GA businesses to share 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 managed by a pooled plan provider (PPP). This structure makes meeting regulations easier and lowers expenses, making it a desirable option for Savannah, GA businesses seeking to simplify their retirement offerings.
Both MEPs and PEPs can dramatically cut down the expenses and time involved in audits, all while maintaining adherence to regulations. Switching to these types of plans may be highly beneficial for smaller firms in Savannah, GA, that want to provide a 401(k) but struggle with the costs and administrative burdens.
Working with the Right Savannah, GA 401(k) Audit Team
401(k) audits can be daunting, but choosing the right support can make all the difference. 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 having the right experts on your side is important:
- Experience and Expertise: A highly experienced group will be familiar with the nuances of 401(k) audits, encompassing full-scope and limited-scope audits. We can guide you through the documentation process and highlight areas for enhancement within your plan.
- Compliance Assurance: The right team will help you stay on top of evolving regulations, making sure your plan complies with all required guidelines.
- Tailored Support: Each 401(k) plan has unique requirements. An experienced team will partner with you to grasp the unique needs of your plan and help you prepare for your specific audit requirements. Correct Capital currently manages over 37 plans in both small and large companies, representing 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: Getting ready for a 401(k) audit can consume a lot of time from day-to-day operations. The proper team will take on much of the administrative burden, giving your HR and finance teams to focus on other priorities. Correct Capital makes the process smoother, reducing the pressure on your internal team.
- MEPs and PEPs Expertise: For businesses enrolled 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 experienced, reliable team is key to ensuring your 401(k) audit in Savannah, GA is as painless as possible. With Correct Capital supporting you, 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 Savannah, GA
Complying with 401(k) audits is both a legal requirement and an opportunity to ensure your Savannah, GA company's retirement plan remains as beneficial as possible to your employees. Correct Capital’s knowledge of helping Savannah, GA businesses complete the 401(k) audit lightens the load, enabling you to concentrate on your operations while avoiding fines 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 through to compliance checks, making sure your plan is set up for success. You can schedule a meeting with a member of our Savannah, GA advisor team, contact us online, or call us at 877-930-401(k) to start the process.
