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week ending September 18th, 2020
With the events of this year, more plan sponsors than usual may have requested an extension of their Form 5500 filing, which means the filings are due next month. Plan sponsors with 100 or more participants must also file a financial audit along with their Form 5500. These financial audits can be useful for improving plan operations and governance. In this edition of PLANSPONSOR Weekend, you’ll find basic information you need to know from award-winning articles, tips for the audit process and suggestions for how to learn from the audit results. Stay well!
Editor's Choice
Compliance
Form 5500 Basics: What Sponsors Need to Know
The purpose of Form 5500 is to obtain information regarding plan design and basic plan sponsor information, and the regulatory penalties for failures in filing the form can be severe.
Compliance
What to Know About Financial Audits Filed with Form 5500s
Plan sponsors required to file a financial audit along with their Form 5500 should know how regulators use the information and how to pick the best auditor.
Ask the Experts
Tips to Reduce Participant Count to Avoid Financial Audit Requirement
“We are a small nonprofit that sponsors an ERISA 403(b) plan. Until now our plan has been small enough to avoid the plan financial audit requirement, but, due to a lot of former employees retaining balances in the plan, we will now have more than 100 participants on 1/1/2020. We can use the 80/120 rule to avoid an audit for 2020 (our plan is a calendar year plan), but I want to be proactive here to avoid crossing the 120-particpant threshold that would require audits in the future.  Are there any steps I can take to reduce the number of participants in the plan?”
Compliance
Engaging With Plan Auditors Can Improve Plan Operations and Governance
In testimony to the ERISA Advisory Council, James Haubrock, with the American Institute of Certified Public Accountants (AICPA), explained how using findings from retirement plan financial audits can help plan sponsors improve their processes and compliance.
Compliance
Retirement Plan Financial Audit Processes Are Evolving
New processes and systems can cut costs for plan sponsors, streamline the work and allow for any discrepancies to be caught earlier.
Popular Reads
Participants
What Participants Want From Employers’ Retirement Plan Websites
A recent study found 81% of participants have logged into their accounts, with most signing in to check account balances or review investment options.
Research
2021 Recordkeeping Survey
Data and Research
U.S. Falls in Natixis Global Retirement Ranking
They survey found that a third of U.S. investors do not believe they have the option to retire.
Deals and People
Retirement Industry People Moves
Northern Trust announces hiring of new CIO; Morgan Stanley partners with Empower; and IRIC appoints executive director.
Ask the Experts
Allowing for After-Tax Contributions in a 401(a) Plan
Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.
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