401(k) Audit Services in Tulsa, OK. For Tulsa, OK businesses offering their employees retirement plans, completing a 401(k) audit can seem like a daunting task. Between compliance requirements 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, it can be overwhelming. However, with the right support, the 401(k) audit can be made much easier 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 are a regulatory requirement. Our team will partner with you with every aspect of document collection through meeting Form 5500 deadlines. Whether you're preparing for your first audit in Tulsa, OK, or hoping to optimize a previously cumbersome process, 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 Tulsa, OK companies who have at least 100 eligible participants in their 401(k) plan. Note: Even if you don’t have more than 100 employees actively contributing to 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 ensures that the retirement plan follows the regulations mandated by the Department of Labor (DOL) and the Employee Retirement Income Security Act (ERISA). It assesses the plan’s overall financial health, ensuring that employee contributions, distributions, and plan activities are accurately represented.
While necessary for compliance, 401(k) audits can be complicated and demanding. Correct Capital helps Tulsa, OK businesses navigate these audits by aiding in document collection, ensuring comprehension of compliance testing, as well as other audit processes. With the right support, handling the audit process can become a much easier process.
Why are 401(k) Audits Necessary for Tulsa, OK Companies?
You must undergo a 401(k) audit for a variety of reasons, to ensure retirement plans remain compliant with federal regulations and safeguard both the employer and employees. Here’s why they are necessary:
- 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, particularly under the Employee Retirement Income Security Act (ERISA).
- Preventing Discrimination: The audit checks if the plan does not unfairly favor higher-paid employees (often referred to as “top-heavy” testing) in order to promote fairness across all participants.
- Identifying Operational Issues: Audits can uncover errors in contributions, distributions, or other aspects of plan management, enabling you to resolve these issues to avoid fines.
- Filing Form 5500: The audit ensures the accurate and on-time filing of Form 5500, a required document summarizing the plan’s financial status, necessary for ensuring compliance with DOL and IRS regulations.
- Contribution Limits: The audit confirms that employer and employee contributions do not exceed IRS limits for the year, helping to avoid 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. Overpriced fees could lead to compliance concerns and affect the long-term growth of employee retirement savings.
- Fiduciary Oversight: The audit confirms that Tulsa, OK employers are serving the interests of plan participants, satisfying their fiduciary responsibilities as mandated by ERISA.
- Verification of Plan Documentation: Verifying that the plan's documents, policies, and operational practices are in compliance with regulatory guidelines is a vital part of the audit.
Types of 401(k) Audits
There are two primary types of 401(k) Audits that Tulsa, OK employers might come across, 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 more comprehensive 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, conformance with 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: Formerly known as 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 may make it a more attractive option for some Tulsa, OK businesses, provided they meet the criteria.
The kind of audit your plan needs is based on your plan’s specific details, such as 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 make sure you're ready for either process.
401(k) Audit Pain Points for Tulsa, OK Employers
While 401(k) audits must be conducted to ensure compliance, they can create major obstacles for Tulsa, OK employers, notably those overseeing more substantial retirement plans. Below are several common challenges that businesses face:
- Document Collection and Management: Gathering the required files, such as account statements, tax returns, and employee data, can be a lengthy process. Employers may find it challenging to organize and submit the necessary paperwork, notably in the case of larger, more complex plans.
- Compliance with Changing Regulations: Remaining compliant with shifting DOL, IRS, and ERISA regulations can be challenging. Compliance errors can result in audit failures, penalties, and costly corrections down the line.
- Discrimination Testing: Ensuring that the plan isn’t top-heavy involves detailed compliance reviews 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 out of their core responsibilities, heightening pressure and distracting them from day-to-day operations.
- Form 5500 and Timely Submissions: Many businesses face challenges when they file Form 5500 properly and punctually, which is essential to 401(k) compliance. Failing to meet the submission date can result in penalties and complicate things for the company.
At Correct Capital, we recognize these obstacles and offer customized assistance to streamline the audit procedure in Tulsa, OK. Be it 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 Tulsa, OK employers looking to lower the administrative burden of a 401(k) audit, Multiple Employer Plans (MEP) and Pooled Employer Plans (PEP) can offer relief. These plans permit various businesses to join a single 401(k) plan, frequently removing 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 permits Tulsa, OK businesses to divide 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 administered by a pooled plan provider (PPP). This structure simplifies compliance and reduces costs, making it a desirable option for Tulsa, OK businesses looking to streamline 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 especially appealing to smaller businesses in Tulsa, OK, who wish to provide a 401(k) plan but are overwhelmed by costs and admin tasks.
Working with the Right Tulsa, OK 401(k) Audit Team
401(k) audits can appear challenging, but choosing the right support can make all the difference. 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 partnering with the right experts matters:
- Experience and Expertise: A highly experienced group is knowledgeable about the nuances of 401(k) audits, encompassing full-scope and limited-scope audits. We can guide you through the documentation process and help identify areas of improvement 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 collaborate with you to identify the unique needs of your plan and guide you in preparing for your specific audit requirements. Correct Capital handles more than 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: Getting ready for a 401(k) audit can consume a lot of time from day-to-day operations. The ideal support will shoulder a lot of the admin work, allowing your HR and finance teams the freedom to concentrate on other tasks. Correct Capital simplifies the entire process, reducing the pressure on your internal team.
- MEPs and PEPs Expertise: For businesses in a Multiple Employer Plan (MEP) or Pooled Employer Plan (PEP), while an separate audit is no longer necessary, 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
Collaborating with a well-informed, reliable team is essential to making sure your 401(k) audit in Tulsa, OK 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 Tulsa, OK
Adhering to 401(k) audit regulations is both a mandatory process and an opportunity to ensure your Tulsa, OK company's retirement plan continues to offer maximum benefit to your employees. Correct Capital’s expertise in guiding Tulsa, OK businesses navigate 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 schedule a consultation and we'll guide you ensure your audit goes smoothly and efficiently. Our team of experts will assist with everything from document collection to compliance checks, guaranteeing your plan is prepared for success. You can schedule a meeting with a member of our Tulsa, OK advisor team, contact us online, or call us at 877-930-401(k) to start the process.
