Albert Discusses DoL Expectations for 403(b) Reporting and Audit

December 15, 2009 ( - Scott C. Albert, chief, Division of Reporting and Compliance for the Department of Labor's Employee Benefits Security Administration (EBSA), said the department expects a good faith effort by 403(b) plan sponsors on annual reporting requirements while it works on additional guidance.

Beginning with the 2009 plan year, 403(b) plans subject to Title I of the Employee Retirement Income Security Act (ERISA) are required to file full Form 5500 reporting.

BNA reports that Albert told an employee benefits conference sponsored by the American Institute of Certified Public Accountants (AICPA) that whether or not a good faith effort was made will be determined by the department on a “case by case basis, especially for reportable contracts,” however, he said a reasonable effort must have been made to locate, identify, and account for contracts.

Albert cited the department’s Field Assistance Bulletin 2009-02 (see 403(b) Relief on Form 5500 Extends to Future Plan Years) which outlined its position on good faith efforts, but said the bulletin provides “enforcement relief, not audit relief,” according to BNA.

Regarding the new requirement of a plan audit for plans with greater than 100 participants, Albert said the DoL “cannot tell accountants how to audit plans or what kind of reports to issue, [o]nly the accounting profession can make those decisions.” However, he said any deviations from these standards need to be “fully disclosed,” according to BNA.

Robert Lavenberg, BDO Seidman LLP’s national partner-in-charge of employee benefit plan audit quality, and also vice-chair of the AICPA Employee Benefit Plan Audit Quality Center Executive Committee told conference attendees that the Field Assistance Bulletin 2009-02 which allows for certain contracts and/or accounts to be excluded from the new requirements is causing “angst” in the accounting profession, as auditors feel these are assets of the plan and their exclusion from financial statements will impact audit reports.

However, Albert said that if a plan administrator excludes a contract from being audited, then the auditor is under no obligation to audit it, BNA reports.

The Bulletin provides that the DoL will not reject filings if the reasons for modified reports are solely due to the exclusion of the contracts consistent with the field assistance bulletin, and Albert stressed that the department expects the reason for an audit report’s modification to be clearly disclosed in the report. He added that the department also expects that “other scope limitations, such as the exclusion of contracts not meeting [field assistance bulletin] conditions, as well as other exceptions such as missing schedules of non-exempt transactions, delinquent participant contributions, and investment related information,” will be fully disclosed, according to BNA.