Managing a construction company’s retirement plan is no easy task. The rules are complicated and the penalties can be severe. Far too often, however, upper management doesn’t understand this dynamic and designates a person that is not technically-equipped to handle this serious responsibility.
Employers often hire a myriad of advisors to help them administer their plan, but these advisors do just that – help. As the plan administrator, the employer is responsible for the plan unless they pay a hefty fee to offload that responsibility, which makes it so surprising that many employers give this responsibility to the wrong person in their organization.
Some of the most important aspects of plan management are:
Is your construction company’s employee benefit plan participant count causing you to become dangerously close to needing an audit? Have you just received your compliance testing results from your record-keeper and realized that your benefit plan requires an audit this year? Your first response may be to panic (because who doesn’t panic at the word “audit”?). Then you find out that your plan will be subject to a limited-scope audit rather than a full-scope audit. Whew! Luckily, your custodian provides certified trust statements, eliminating the need for the auditor to perform investment valuation and investment purchase and sales testing. So, what else could the auditors really test in a benefit plan? The reality may surprise you!
While a limited-scope audit may scale back the scope of the audit and reduce the amount of testing to be performed during fieldwork, the audit procedures are not reduced as significantly as you might expect. A limited-scope audit still requires
How to Pick a Benefit Plan Auditor
There are plenty of benefit plan auditors out there – over 7,000 in fact. However, don’t make the mistake of believing that just any company can effectively audit your plan. Department of Labor statistics indicate that one in three audits performed are deficient, and the DOL has made hundreds of referrals to the AICPA Ethics division for this poor work. Unfortunately, the negative exposure from a failed audit reflects on you, the plan sponsor, so it is important to select a firm you can trust. Here are some suggestions on how to find a qualified auditor for your construction company’s benefit plan:
The Affordable Care Act added a new section 18B to the Fair Labor Standards Act “FLSA.” This new section requires every employer that is subject to the FLSA to provide written notice of the new health insurance exchanges (aka health insurance marketplaces) as a coverage option to all current employees by October 1, 2013. Subsequent new hires must be provided the notice within 14 days of being hired. Generally speaking, businesses that are covered by the FLSA must have at least two employees and have annual sales or business revenue in excess of $500,000. Hospitals, schools and government agencies also are included. All included employers must provide the notice regardless of size. All employees, regardless of part-time or full-time status, are required to receive the notice.
The marketplaces are a new health coverage option for employees who are or are not offered coverage from their employer. The marketplaces will operate in some form in every state. The notices are required to include information about
That depends on who you ask. If you ask an employer that takes their fiduciary obligations seriously, or one that has had problems with their plan in the past, then the audit is very valuable. However, if you ask an employer that is not so in-tune with their fiduciary obligations and views the audit as a commodity that goes to the lowest bidder, then the audit is a hassle and of little or no value.
For many, a benefit plan audit is not an option:
Once a retirement plan falls into the large plan category, an audited financial statement is