401(k) Audit Services in Shreveport, LA. For Shreveport, LA businesses that offer retirement plans, completing a 401(k) audit can seem like a daunting task. Between compliance requirements from the Department of Labor (DOL) and IRS, collecting extensive documentation, and ensuring that your plan doesn't favor 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 cause considerable frustration and are mandatory. Our team will work with you for everything from document collection to meeting Form 5500 deadlines. Whether you're navigating your first audit in Shreveport, LA, or hoping to optimize a previously cumbersome process, we're here to minimize the hassle. 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 annual review necessary for Shreveport, LA 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 enrolled 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 confirms that the retirement plan follows 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 employee contributions, distributions, and operations are properly documented.
While necessary to meet legal requirements, 401(k) audits can be challenging and lengthy. Correct Capital supports Shreveport, LA businesses get ready for these audits by aiding in document collection, helping clarify compliance testing, and other related tasks. With an experienced team by your side, getting through the audit can become a much easier process.
Why are 401(k) Audits Necessary for Shreveport, LA Companies?
You are required to undergo a 401(k) audit for multiple purposes, to ensure 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: The purpose of audits is to confirm that your 401(k) plan follows all legal requirements set by the Department of Labor (DOL) and the IRS, especially under the Employee Retirement Income Security Act (ERISA).
- Preventing Discrimination: The audit verifies whether the plan does not unfairly favor higher-paid employees (often known as “top-heavy” testing) to guarantee the plan treats all employees fairly and equally.
- Identifying Operational Issues: Audits can uncover errors in contributions, withdrawals, or additional plan operations, allowing you to correct these issues to avoid penalties.
- Filing Form 5500: The audit guarantees the accurate and on-time filing of Form 5500, a yearly filing summarizing the plan’s financial status, needed to uphold compliance with DOL and IRS regulations.
- Contribution Limits: The audit confirms that employer and employee contributions stay within IRS contribution limits, preventing excess contributions that could lead to penalties.
- Fee Reasonableness: Auditors may evaluate plan fees to confirm they are reasonable and not overly expensive for participants. High fees can raise compliance concerns and hurt how employees' investments and savings perform.
- Fiduciary Oversight: The audit confirms that Shreveport, LA employers are working to benefit plan participants, meeting their fiduciary responsibilities as required by ERISA.
- Verification of Plan Documentation: Verifying that the plan's documents, policies, and operational practices are aligned with regulatory guidelines is a key part of the audit.
Types of 401(k) Audits
There are two main categories of 401(k) audits that Shreveport, LA employers may encounter, based on the specific details 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 more comprehensive audit necessary for most larger 401(k) plans. In a full-scope audit, the independent auditor examines every part of the plan, including financial statements, adherence to Department of Labor (DOL) and IRS regulations, and participant data. The auditor reviews supporting documentation for contributions, distributions, and other transactions to confirm correctness and adherence to regulations.
- Section 103(a)(3)(C)) Audit: Previously referred to as 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 substantially lower the audit’s complexity and cost. This could make it a better alternative for some Shreveport, LA businesses, if they satisfy the criteria.
The specific audit required is based on your plan’s unique features, including the nature of its investments. At Correct Capital, we are able to assist you figure out which type of audit your plan needs and ensure you're fully prepared for either process.
401(k) Audit Pain Points for Shreveport, LA Employers
While 401(k) audits are required to meet legal obligations, they frequently pose difficulties for Shreveport, LA employers, notably those managing larger plans. Here are some of the key pain points that employers encounter:
- Document Collection and Management: Collecting the required files, such as account statements, tax returns, and employee data, can be labor-intensive. Employers frequently have difficulties to organize and deliver the necessary paperwork, particularly with larger, more complex plans.
- Compliance with Changing Regulations: Keeping pace with shifting DOL, IRS, and ERISA regulations can be challenging. Compliance missteps can lead to audit failures, fines, and expensive fixes later on.
- 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: Preparing for an audit takes HR professionals, business owners, administrators, and others away from their core responsibilities, heightening pressure and diverting attention from regular business activities.
- Form 5500 and Timely Submissions: Many businesses struggle to file Form 5500 accurately and on time, which plays a critical role in 401(k) compliance. Failing to meet the submission date can result in penalties and complicate things for the company.
At Correct Capital, we are aware of the difficulties involved and deliver personalized help to make the audit process in Shreveport, LA smoother. 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 Shreveport, LA employers looking to lower the complexity of a 401(k) audit, Multiple Employer Plans (MEP) and Pooled Employer Plans (PEP) can provide solutions. These plans allow unrelated employers to consolidate into one 401(k) plan, frequently removing employer-specific audits.
- Multiple Employer Plans (MEP): These plans pool together several unrelated employers into one 401(k) plan, reducing the cost and complexity of managing and auditing individual plans. This setup enables Shreveport, LA businesses to distribute the administrative responsibilities and often sidestep the annual 401(k) audit altogether.
- Pooled Employer Plans (PEP): Introduced more recently, PEPs permit unrelated employers to join a shared 401(k) plan administered by a pooled plan provider (PPP). This structure makes meeting regulations easier and cuts costs, making it attractive for Shreveport, LA businesses seeking to simplify their retirement offerings.
Both MEPs and PEPs can substantially decrease the costs and time required for audits, while still ensuring compliance with federal regulations. Switching to these types of plans may be highly beneficial for smaller firms in Shreveport, LA, who wish to provide a 401(k) plan but are overwhelmed by costs and admin tasks.
Working with the Right Shreveport, LA 401(k) Audit Team
401(k) audits can be daunting, but choosing the right support changes everything. Working with a team 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 having the right experts on your side is important:
- Experience and Expertise: A team of experts is knowledgeable about the complexities of 401(k) audits, covering both 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, making sure your plan complies with all required guidelines.
- Tailored Support: Every 401(k) plan is different. An experienced team will collaborate with you to grasp the unique needs of your plan and help you prepare 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, giving us the expertise to handle any company 401(k) plan.
- Saving Time and Resources: Audit preparation can distract you significantly from day-to-day operations. The proper team will handle most of the administrative tasks, enabling 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 audit specific to your plan is not required, you're still required to comply with all the rules and regulations, but with fewer administrative responsibilities after plan year end.
*as of March 2024
Partnering with a knowledgeable, reliable team is key to ensuring your 401(k) audit in Shreveport, LA runs efficiently and stress-free. With Correct Capital by your side, you’ll have the confidence that your audit will be conducted thoroughly and on time.
Call Correct Capital for Help With Your 401(k) Audit in Shreveport, LA
Adhering to 401(k) audit regulations is both a legal requirement and an opportunity to verify your Shreveport, LA company's retirement plan remains as beneficial as possible to your employees. Correct Capital’s expertise in guiding Shreveport, LA businesses through the 401(k) audit helps ease the burden, enabling you to concentrate on your operations while ensuring you're not penalized for non-compliance.
Contact Correct Capital today to book a meeting and allow us to assist you ensure your audit goes smoothly and efficiently. Our team of experts will assist with everything 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 Shreveport, LA advisor team, contact us online, or call us at 877-930-401(k) to get started.
