On Wednesday, March, 24, Jay Kessler presented at the Boston Fiduciary Summit at the UMASS Club in Boston.
Jay talked about the difference between an IRS audit and a DOL audit. An IRS audit of a 401(k) will focus more on the qualified status of the plan while the DOL focuses on fiduciary standards, reporting and disclosure requirements. It is generally believed that certain industries are being targeted such as restaurants and retail that tend to have lower levels of participation.
If the IRS or DOL calls, it is best to get your advisers on the call with you. Answer the agency’s questions honestly and don’t hold too much back. You may be able to prevent the issue in question from being escalated to the level of an audit.
Jay answered a question about hiring a CPA firm for a 401(k) audit: He responded that it is important to hire a CPA firm that has expertise in 401(k) audits because the DOL is now asking some companies for their auditor’s workpapers. If the CPA’s process or results are found to be lacking, the prior years of 5500 filings can be rejected.
Samet has released its 2014 Plan Sponsor’s Guide to 401(k) and 403(b) Plans. Download the Plan.