Qualified Retirement Plan Audits – What Your TPA Needs to Know

ERISA (the Employee Retirement Income Security Act of 1974) requires qualified retirement plans with 100 or more eligible participants (AKA – large plans) on the first day of the plan year to undergo an independent audit of their financial statements annually. While some fancy footwork on your compliance consultant’s part may help you avoid or delay the need for this audit, generally, if you have 100 or more eligible participants, assume your plan will need an audit each year.

About The Audit

These annual audits must be conducted by an independent CPA firm of the plan sponsor’s choosing. The Department of Labor says that you should engage an Independent Qualified Public Accountant to perform the audit. In simplified terms, that means you should hire a firm that regularly audits qualified retirement plans. This will ensure that the audit is performed properly, and more importantly, their expertise and experience will make your life easier.

The audit serves to establish that the plan is operated in compliance with government regulations and follows the rules in its own plan document. It also ensures that the plan’s financial statements accurately reflect the information for that plan year. Quality, proficient retirement plan auditors will assess each area of your plan in accordance with your plan terms and federal regulations.  They will also help to ensure errors are avoided or corrected.

Before You Schedule Your Audit –
Talk to Your Compliance Consultant\TPA Firm

When done correctly, audits can be a painless part of the annual administration process for large plan sponsors. However, forgetting to include your compliance consultant in the planning process can cause major headaches for everyone involved.

An adept compliance consulting firm should complete and gather almost all the information your auditor will need to review for your plan. The audit of your retirement plan hinges on the completion of the government forms and required testing your compliance consultant performs for you annually. Failing to include your TPA, or scheduling the audit without first consulting your TPA, will likely result in insufficient documentation, incomplete testing, a delayed audit, and a frustrated auditor. A good compliance consulting firm will partner with your auditing firm to make your life easier and make the auditing process go more smoothly. Start by consulting your TPA prior to scheduling your audit so that they can work with the auditors to schedule a time for the audit that works well for everyone and allows your TPA firm to be available to do the heavy lifting for you.

Need Recommendations?

If you need assistance finding a CPA firm to audit your plan, ask your compliance consultant for a list of referrals. Because we gather the data, complete the required testing, and work with CPA firms to complete plan audits, we’re familiar with local firms and have worked with many over the years.


TriStar Pension Consulting | 405-848-401k | contact@tristarpension.com

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