What Are the Most Common Errors Found in Plan Audits?

By ASPPA Net Staff • January 26, 2018 • 0 Comments

A recent conversation between Trucker Huss’ Callan Carter and Diane Wasser of the CPA firm EisnerAmber LLC spotlights errors commonly found in a retirement plan audit.

An auditor tests a sample of an employer’s employee population when reviewing a plan. Wasser says, and once he or she discovers an error they must determine how to respond — which can include testing a larger sample or seeking additional information.

Some errors are more widespread than others, Wasser says. These include:

  • using incorrect compensation in calculating employer and employee contributions;

  • improperly applying eligibility provisions; and

  • improperly conducting nondiscrimination testing.

There are ways to head off errors, says Wasser. Among them:

  • have a highly qualified plan auditor, a knowledgeable plan recordkeeper and an ERISA counsel;

  • take the fiduciary role seriously;

  • review the plan before the review process starts;

  • actively read the plan document and amendments;

  • compare the plan document and amendments to the way the plan is run; and

  • consult with qualified professionals to correct any errors discovered as soon as possible.

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