ASPPA Again Requests Audit Relief for 403(b)s

February 22, 2011 ( - ASPPA and the National Tax Sheltered Accounts Association (NTSAA), a division within ASPPA made up of 403(b) plan professionals, have renewed their appeal to the Department of Labor for additional transitional relief for 403(b) plan sponsors struggling to meet the new compliance requirements of Form 5500s.

In a statement, Craig P. Hoffman, General Counsel and Director of Regulatory Affairs of ASPPA, noted: “For the first time since ERISA was enacted, certain 403(b) plans were required last year to file an independent audit report with their Form 5500. Because of the way 403(b) plan contributions are invested, plan sponsors had and will continue to have significant difficulties with the financial statement requirements. Sponsors are doing their best to meet the new DoL mandates but are struggling and facing staggering expenses which they cannot afford.”  

The statement said ASPPA and NTSAA members report that the required audit costs are sky-rocketing (often $50,000 – $100,000 per plan) and the plan sponsors simply don’t have the money to cover these expenses.   

Hoffman explained that often 403(b) plans are required to have costly full scope audits because of an auditors’ lack of familiarity with a 403(b) plan or because some vendors are unable to offer the limited scope certification needed to avoid a full scope audit. “Plan fiduciaries often cannot resolve these problems because they do not have the authority to direct participants to transfer the funds to another provider or surrender the contract. In effect, the plan is stuck with the contract unless the participant takes action,” Hoffman said.  

NTSAA and ASPPA’s recommendations for transitional relief include: 

  • Opening Balance Relief: Accept the financial statements of the employer based on the documented good faith effort and only require an auditor’s opinion for financial activity for the current year, assuming a correct opening balance. This would be consistent with similar transitional relief that was provided when ERISA was first enacted. 
  • Disclaimed Audit Relief: Issue a rule to ensure the audit will provide useful information to fiduciaries, the DoL, and participants while substantially reducing expenses. If an auditor is unable to issue an opinion because of the limited scope exemption, or where a limited scope cannot be formed because of the lack of a vendor certification, the groups suggest the auditor opine on the business controls of the plan sponsor or other financial matters of the plan. 
  • Develop 403(b) Plan Auditing Guidelines: Form a committee of industry experts to suggest, review, and modify existing audit guidelines. 


The groups first made their request for audit relief last October (see ASPPA Demands 403(b) Form 5500 Relief).