401(k) Audit Services in Vancouver, WA. For Vancouver, WA businesses that offer retirement plans, navigating a 401(k) audit can seem like an uphill battle. Between compliance requirements from the Department of Labor (DOL) and IRS, collecting extensive documentation, 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 are a regulatory requirement. Our team will work with you with every aspect of document collection to meeting Form 5500 deadlines. Whether you're getting ready for your initial audit in Vancouver, WA, or seeking to simplify a process that's usually a burden, 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, 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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About 401(k) Audits
A 401(k) audit is an annual review mandated for Vancouver, WA 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 still need an audit if there are 100 who are eligible. The audit verifies that the retirement plan complies with the regulations established by the Department of Labor (DOL) and the Employee Retirement Income Security Act (ERISA). It assesses the plan’s financial integrity, ensuring that employee contributions, distributions, and operations are accurately represented.
While necessary for compliance, 401(k) audits can be complex and lengthy. Correct Capital assists Vancouver, WA 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, navigating the audit can become a much easier process.
Why are 401(k) Audits Necessary for Vancouver, WA Companies?
You need to undergo a 401(k) audit for a variety of reasons, 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 established 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 isn't overly advantageous to higher-paid employees (often known as “top-heavy” testing) to ensure fairness across all participants.
- Identifying Operational Issues: Audits often expose errors in employee contributions, withdrawals, or other aspects of plan management, allowing you to correct these issues so they don't lead to penalties.
- Filing Form 5500: The audit ensures proper and timely submission of Form 5500, a yearly filing detailing 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 may result in penalties.
- Fee Reasonableness: Auditors may review plan fees to ensure they are reasonable and don’t pose an excessive cost for participants. Overpriced fees could lead to compliance concerns and hurt how employees' investments and savings perform.
- Fiduciary Oversight: The audit ensures that Vancouver, WA employers are serving the interests of plan participants, fulfilling their fiduciary responsibilities as outlined in ERISA.
- Verification of Plan Documentation: Ensuring that the plan's documents, policies, and operational practices are consistent 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 Vancouver, WA employers might come across, depending on the size and complexity 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 mandated for most larger 401(k) plans. In a full-scope audit, the independent auditor evaluates all components of the plan, such as financial statements, adherence to Department of Labor (DOL) and IRS regulations, and participant data. The auditor examines supporting documentation for contributions, withdrawls, and other transactions to confirm correctness and adherence to regulations.
- Section 103(a)(3)(C)) Audit: Formerly known as a "Limited Scope Audit," these apply 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 endorsed by the financial institution, which can greatly lessen the audit’s complexity and cost. This can make it a more attractive option for some Vancouver, WA businesses, provided they meet the criteria.
The kind of audit your plan needs depends on your plan’s particular characteristics, like the nature of its investments. At Correct Capital, we are able to assist you understand which type of audit your plan requires and make sure you're ready for either process.
401(k) Audit Pain Points for Vancouver, WA Employers
While 401(k) audits are required to meet legal obligations, they often present significant challenges for Vancouver, WA employers, notably those overseeing more substantial retirement plans. Here are some of the key pain points that companies deal with:
- Document Collection and Management: Assembling the right documents, such as account statements, tax returns, and employee data, can be labor-intensive. Employers frequently have difficulties to arrange and deliver the necessary paperwork, notably in the case of larger, more complex plans.
- Compliance with Changing Regulations: Keeping pace with shifting DOL, IRS, and ERISA regulations can be challenging. Compliance errors can lead to audit failures, penalties, and pricey amendments in the long run.
- Discrimination Testing: Making sure that the plan isn’t top-heavy requires careful compliance checks and can lead to additional documentation and reporting.
- Time and Resource Demands: Preparing for an audit draws HR professionals, business owners, administrators, and others off of their core responsibilities, heightening pressure and shifting focus from everyday business tasks.
- Form 5500 and Timely Submissions: Many businesses face challenges when they file Form 5500 correctly and before the deadline, which plays a critical role in 401(k) compliance. Failing to meet the submission date could cause penalties and complicate things for the company.
At Correct Capital, we are aware of the difficulties involved and deliver personalized help to streamline the audit procedure in Vancouver, WA. 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 Vancouver, WA employers looking to lower the complexity of a 401(k) audit, Multiple Employer Plans (MEP) and Pooled Employer Plans can ease the process. These plans permit various businesses to participate in a unified 401(k) plan, often eliminating 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 Vancouver, WA businesses to distribute the administrative responsibilities and possibly eliminate the annual 401(k) audit altogether.
- Pooled Employer Plans (PEP): Introduced more recently, PEPs enable unrelated employers to join a shared 401(k) plan managed by a pooled plan provider (PPP). This structure makes meeting regulations easier and reduces costs, making it a desirable option for Vancouver, WA businesses looking to streamline their retirement offerings.
Both MEPs and PEPs can substantially decrease the costs and time required for audits, all while maintaining adherence to regulations. Moving to one of these plans may be particularly attractive for small companies in Vancouver, WA, who want to offer a 401(k) but find the costs and paperwork challenging.
Working with the Right Vancouver, WA 401(k) Audit Team
401(k) audits can appear challenging, but selecting the proper assistance can greatly improve the process. Working with a team 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 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 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 work closely with you to identify the unique needs of your plan and assist you in getting ready for your specific audit requirements. Correct Capital currently manages over 37 plans in both small and large companies, and represents over $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: Audit preparation can take considerable time away from day-to-day operations. The ideal support will handle most of the administrative tasks, giving your HR and finance teams the ability to address other important matters. Correct Capital makes the process smoother, easing the load for your internal team.
- MEPs and PEPs Expertise: For businesses in a Multiple Employer Plan (MEP) or Pooled Employer Plan (PEP), while an audit specific to your plan is no longer necessary, 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
Collaborating with a well-informed, reliable team is key to ensuring your 401(k) audit in Vancouver, WA runs efficiently and stress-free. With Correct Capital supporting you, you’ll feel secure that your audit will be completed efficiently and accurately.
Call Correct Capital for Help With Your 401(k) Audit in Vancouver, WA
Meeting 401(k) audit requirements is both a legal requirement and an opportunity to ensure your Vancouver, WA company's retirement plan continues to offer maximum benefit to your employees. Correct Capital’s experience in assisting Vancouver, WA businesses through the 401(k) audit helps ease the burden, allowing you to focus on your business while avoiding fines for non-compliance.
Contact Correct Capital today to book a meeting and let us help 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 Vancouver, WA advisor team, contact us online, or call us at 877-930-401(k) to begin.