Published by Kim Moore on Oct 22, 2014 4:58:00 PM
As a 401k plan administrator you know that it’s essential to establish and manage internal controls that include the reconciliation and reporting of your contributions and distributions. The internal control objectives of your plan benefit distributions and contributions to the plan may include things such as:
- To confirm an eligible participant is enrolled in accordance with the plan documents as well as the entry date rules.
- Confirm that contributions made by both the employer and plan participant meet the required amounts and are within the contribution or deferral limits issued by the IRS.
- Confirm that cash disbursement records are reconciled and properly recorded.
- Investigate any long outstanding payable benefits. This may indicate a check issued to a participant or beneficiary that was never received or cashed.
- Controls should provide assurance that the appropriated asset purchases or redemptions are made in the appropriate plan to the appropriated participants as a result of activity.
- Authorized approvals for transactions, as required.
- Review all transactions to ensure accuracy and timeliness of processing.
- Investigate in a timely manner any past-due contributions.
- Attempt to identify and locate lost participants who have account balances.
- Ensure that any required notices and disclosures are distributed in a timely manner and the distribution is documented.
- Ensure that only those with a logical need have access to computerized records.
- In accordance with the plan agreement, controls are established over forfeitures and utilization/ allocation of forfeitures.
- Intermittent correspondence with a terminated participant or beneficiary is maintained, to ensure that the participant/beneficiary can receive their account balance at the appropriate time frame.
Retirement plans can be very complex. As an innovative firm Summit CPA specializes in 401(k) audits. We have the ability to offer assistance entirely off-site with little or no distraction to your daily office routine. We also offer flat-fee pricing so there are no surprises on your bill when the job is complete. For assistance contact our office at (866) 497-9761 to schedule an appointment.