401(k) Audit Services in Atlanta, GA. For Atlanta, GA businesses offering their employees retirement plans, navigating a 401(k) audit can seem like a daunting task. Between compliance requirements from the Department of Labor (DOL) and IRS, organizing necessary documents, and ensuring that your plan doesn't favor higher-paid employees, it can be overwhelming. 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 cause considerable frustration even though they cannot be avoided. Our team will assist you with every aspect of document collection to making sure Form 5500 is filed correctly and on time. Whether you're getting ready for your initial audit in Atlanta, GA, or looking to streamline a process that's usually a burden, we're here to minimize the hassle. 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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About 401(k) Audits
A 401(k) audit is an annual review necessary for Atlanta, 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 still need an audit if there are 100 who are eligible. The audit verifies that the retirement plan adheres to the regulations mandated by the Department of Labor (DOL) and the Employee Retirement Income Security Act (ERISA). It assesses the plan’s financial integrity, ensuring that contributions, withdrawals, and plan activities are properly documented.
While required for regulatory purposes, 401(k) audits can be complicated and demanding. Correct Capital assists Atlanta, GA businesses get ready for these audits by assisting with document collection, ensuring comprehension of compliance testing, as well as other audit processes. With an experienced team in your corner, handling the audit process can become a far more manageable task.
Why are 401(k) Audits Necessary for Atlanta, GA Companies?
You must undergo a 401(k) audit for a variety of reasons, ensuring that retirement plans adhere to federal regulations and safeguard both the employer and employees. Here’s why they are required:
- 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, with emphasis 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 ensure fairness across all participants.
- Identifying Operational Issues: Audits often expose errors in employee contributions, distributions, or other facets of plan oversight, allowing you to correct these issues so they don't lead to penalties.
- Filing Form 5500: The audit confirms proper and timely submission 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 remain within IRS limits for the year, 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 negatively impact how employees' investments and savings perform.
- Fiduciary Oversight: The audit confirms that Atlanta, GA employers are working to benefit plan participants, satisfying their fiduciary responsibilities as required by ERISA.
- Verification of Plan Documentation: Ensuring that the plan's documents, policies, and operational practices are aligned 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 Atlanta, GA 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 most detailed audit necessary for most larger 401(k) plans. In a full-scope audit, the external 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 evaluates supporting documentation for contributions, distributions, and other transactions to ensure accuracy and compliance.
- Section 103(a)(3)(C)) Audit: Previously called a "Limited Scope Audit," these pertain 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 does not need to audit the investment information verified by the financial institution, which can greatly lessen the audit’s complexity and cost. This may make it a preferable choice for some Atlanta, GA businesses, as long as they meet the criteria.
The specific audit required depends on your plan’s particular characteristics, such as the nature of its investments. At Correct Capital, we can help you understand which type of audit your plan needs and make sure you're ready for either process.
401(k) Audit Pain Points for Atlanta, GA Employers
While 401(k) audits are necessary for compliance, they often present significant challenges for Atlanta, GA employers, especially those managing larger plans. Here are some of the key pain points that businesses face:
- Document Collection and Management: Assembling the right documents, such as account statements, tax returns, and employee data, can be time-consuming. Employers may find it challenging to arrange and file the necessary paperwork, particularly with larger, more complex plans.
- Compliance with Changing Regulations: Remaining compliant with evolving DOL, IRS, and ERISA regulations can be challenging. Compliance missteps can result in audit failures, penalties, and pricey amendments later on.
- Discrimination Testing: Making sure that the plan doesn't favor higher earning employees involves detailed compliance reviews and can lead to 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, increasing stress and diverting attention 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 a key component of 401(k) compliance. Late submissions can result in penalties and create further issues for the company.
At Correct Capital, we are aware of the difficulties involved and offer customized assistance to streamline the audit procedure in Atlanta, GA. 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 Atlanta, GA employers looking to lower the workload of a 401(k) audit, Multiple Employer Plans (MEP) and Pooled Employer Plans can provide solutions. 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, lowering the expenses and simplifying the management of managing and auditing individual plans. This setup enables Atlanta, GA businesses to share the administrative responsibilities and potentially avoid the annual 401(k) audit altogether.
- Pooled Employer Plans (PEP): Recently established, PEPs enable unrelated employers to enter a unified 401(k) plan overseen by a pooled plan provider (PPP). This structure streamlines the regulatory process and reduces costs, making it a desirable option for Atlanta, GA businesses looking to streamline their retirement offerings.
Both MEPs and PEPs can significantly reduce audit-related costs and time commitments, while still ensuring compliance with federal regulations. Switching to these types of plans may be particularly attractive for small companies in Atlanta, GA, who wish to provide a 401(k) plan but are overwhelmed by costs and admin tasks.
Working with the Right Atlanta, GA 401(k) Audit Team
401(k) audits can be daunting, but choosing the right support changes everything. Working with a team that is well-versed in both the technicalities and practicalities of the audit process helps you avoid unnecessary delays and anxiety. Here’s why partnering with the right experts matters:
- Experience and Expertise: A team of experts 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 help identify areas of improvement within your plan.
- Compliance Assurance: The right team ensures you keep up with evolving regulations, confirming your plan adheres to all regulations.
- Tailored Support: All 401(k) plans are distinct. An experienced team will collaborate with you to understand the unique needs of your plan and help you prepare 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: Preparing for a 401(k) audit can consume a lot of time from day-to-day operations. The ideal support will take on much of the administrative burden, allowing your HR and finance teams the freedom to concentrate on other tasks. Correct Capital simplifies the entire process, taking the stress off your internal team.
- MEPs and PEPs Expertise: For businesses participating in an MEP or PEP, while an individual plan audit is no longer necessary, you're still obligated to adhere to 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 Atlanta, GA is as painless as possible. With Correct Capital by your side, you’ll have the confidence that your audit will be handled with precision and care.
Call Correct Capital for Help With Your 401(k) Audit in Atlanta, GA
Complying with 401(k) audits is both a mandatory process and an opportunity to ensure your Atlanta, GA company's retirement plan continues to offer maximum benefit to your employees. Correct Capital’s experience in assisting Atlanta, GA businesses navigate the 401(k) audit reduces the strain, allowing you to focus on your business while avoiding fines for non-compliance.
Contact Correct Capital today to arrange a session and we'll guide you get ready for a streamlined, effective audit. Our team of experts will support you with everything, including document collection through to compliance checks, ensuring your plan is fully optimized. You can schedule a meeting with a member of our Atlanta, GA advisor team, contact us online, or call us at 877-930-401(k) to get started.
