Lack of Documentation Still an Issue During 401(k) Audit Season

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The employee benefit plan audit season, which lasts from April through the extended Form 5500 filing deadline of October 15th, is well underway and we are finding that lack of proper documentation for plan transactions – typically hardship distributions, participant loans, and rollovers into the plan – is still an issue for many plan sponsors.

Earlier this year the Internal Revenue Service (IRS) posted clear guidance on its website reminding plan sponsors that obtaining and retaining records related to hardships and loans is their responsibility, even when recordkeeping for the plan is outsourced to a third party administrator. Specifically, …read more

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