The 2011 Retirement Plan Survey released by Grant Thornton LLP finds 81% of 403(b) sponsors surveyed report they’ve established adequate internal controls over ongoing operations. Another 15% say they have “somewhat” established adequate internal controls over ongoing operations.
One of the biggest challenges in 2009 was that it the first year that large 403(b) plans (>100 participants) required an audit with their Form 5500 filing. However, despite the prior lack of plan oversight and records, more than half (56%) of our respondents said they had no difficulty getting plan level reporting for pre-2009 annuity contracts. Seventeen percent reported having moderate difficulty and 27% found it very difficult to gather pre-2009 annuity contracts for the audit process.
The survey report notes that for plans that have been in existence for many years, gathering the necessary data and getting their arms around opening balances created burdens that a lot of sponsors never expected. The Department of Labor offered some relief (see DoL Relief on Form 5500 Reporting Requirements for 403(b)s).
According to the report, the DoL recently reported that these challenges likely resulted in 20% of 5500s filed by plan sponsors being either incomplete or containing disclaimer opinions. The agency was reportedly questioning the high number of “clean” audits (see EBSA Questioning Number of “Clean” Audits).Drinker Biddle & Reath, Grant Thornton LLP, and Plan Sponsor Advisors conducted the survey online from November 2010 to January 2011, with 429 independent plan sponsors participating.