The Department of Labor, Internal Revenue Service, and the Pension Benefit Guaranty Corporation together built up the Form 5500 Series so representative advantage arrangements could use the Form 5500 Series structures to fulfill yearly reporting prerequisites under Title I and Title IV of ERISA and the Internal Revenue Code.
The Form 5500 Series is an essential consistence, examination, and revelation instrument for the Department of Labor, an exposure report for arrangement members and recipients, and a wellspring of data and information for use by other Federal organizations, Congress, and the private part in surveying representative advantage, charge, and monetary patterns and approaches. The Form 5500 Series is a piece of ERISA’s general reporting and divulgence structure, which is planned to guarantee that worker advantage arrangements are worked and oversaw as per certainly endorsed benchmarks and that members and recipients, and controllers, are given or have entry to adequate data to secure the rights and advantages of members and recipients under representative advantage arranges.
Beginning with the 2009 Form 5500 filings, employee benefit plans under section 403(b) of the Internal Revenue Code that are sponsored by charitable organizations and covered under the Employee Retirement Income Security Act of 1974. (ERISA) will be subject to the same reporting and audit requirements that currently exist for 401(k) plans. These audited financial statements will be a required attachment to the plan’s Form 5500. This requirement applies to commercial or not-for-profit organizations and not governmental or church organizations which are not subject to ERISA. 403(b) plans with more than 100 eligible participants as of the beginning of the year will be submitted to this new requirement.
Even though the new Form 5500 reporting and independent financial statement audit requirements are not effective until the 2009 Form 5500 filing, if your plan meets the requirement to have an independent audit for the plan year ended December 31, 2009, then the plan’s financial statements will also need to include certain comparative financial information as of the 2008 plan year end. This comparative year information is required by the Department of Labor (DOL) to be included in the plan’s financial statements, even in the initial reporting year. Required information includes the current value of plan investments, and the amounts of employer’s contributions owed to the plan, accounts payable and accrued expenses as of the end of the plan year.
In preparation for these new requirements, the Employee Benefit Plan Audit Quality Center recommends that plan administrators take the following steps:
1. Understand how the Department Of Labor new 403(b) financial reporting and audit requirements will affect your plan. You should determine your plan’s Form 5500 reporting and audit requirements. D. Richards with Business and Accounting Solutions, a CPA firm that performs employee benefit audits nationwide stated “it is vital that you establish relatively early whether your CPA firm has the proper expertise and qualifications to perform the audit adequately. An experienced CPA will assist in ensuring that you are meeting the new requirements.”
2. Establish responsibility for the plan’s financial reporting function. Designate an individual to ensure that the plan meets its reporting responsibilities.
3. Enlist a qualified free evaluator for your 403(b) arrangement. Guarantee that the examiner is knowledgeable about advantage arranges. Inquire as to whether they are an individual from the AICPA’s Employee Benefit Plan Audit Quality Center. The middle is a national group of CPA firms that exhibit a guarantee to representative advantage arrangement review quality and is intended to bring issues to light about the significance of ERISA reviews. What’s more, individuals from the Employee Benefit Plan Audit Quality Center are focused on holding fast to the most noteworthy quality measures by willfully consenting to the Center participation prerequisites, which incorporates assigning an accomplice in charge of our worker advantage arrangement review work on, building up quality control programs, performing yearly inward assessment systems, and making peer survey report discoveries openly accessible.
4. Communicate with your service provider on the plan’s information needs. Ask the service provider if they will be able to provide you with the information needed for your plan’s financial statement audit and Form 5500. Also ask your service provider if they will make available an “SAS 70” report on the internal controls established to process your plan’s transactions.
Every firm focuses their benefit plan audit marketing with the goal of obtaining 12/31 engagements. However, the “marketing intelligence” can open the door to four other types of opportunities:
Now is your opportunity to contact a leading national ERISA benefits consulting group to get your questions answered and to establish or re-establsih your companies plan for compliance.
Call us today at (515)-244-2424 or fill out our contact form and we will contact you quickly.