Art of the Qualified Plan Audit

Do You Have a Template for a Request for Proposal (RFP) for a 401(k)/403(b) Plan? Almost every time I present an educational seminar, at least one attendee asks me if I have a template for a retirement plan audit RFP. After discussing the importance of selecting a quality plan auditor and providing a list of … Continued

Background Effective January 1, 2026, catch-up eligible participants who are High Earners must make catch-up contributions on the Roth basis. The industry has been using the term Highly Paid Individuals, so we will use both terms for the sake of clarity and consistency with other published articles. Before delving into the details on how to … Continued

In Summary Applicability and Exemptions: Effective for plan years after December 31, 2024, new plans established after December 29, 2022, must implement automatic enrollment; however, exemptions apply to “grandfathered” pre-enactment plans, businesses with 10 or fewer employees, companies in business for less than three years, and governmental, church, or SIMPLE plans. Contribution and Escalation Mechanics: … Continued

Much like our celebratory moment on the field last summer — when our firm’s softball team stepped up to the plate and swung for the fences to clinch the 2025 local accounting-firm championship — retirement plan limits are stepping up in 2026 to keep the retirement-plan game moving forward. The Internal Revenue Service has announced … Continued

In Summary Mandatory Roth Contributions for High Earners: Effective January 1, 2026, “High Earners” (defined as participants with prior-year FICA wages exceeding $150,000) are required to make all catch-up contributions—including the new “Super Catch-Up” for participants aged 60–63—on a Roth (after-tax) basis. Exclusions and Plan Limitations: The mandate strictly applies to employees with W-2 FICA … Continued

In Summary Common Errors and Overpayments: Due to the complexity of retirement plan rules, errors are common, resulting in excess amounts (operational failures). If these excess funds are distributed to a participant, it becomes an overpayment failure, which can stem from issues like inaccurate testing, incorrect vesting, or ineligible distributions. Correction Relief for Inadvertent Overpayments: … Continued

In Summary The 80-120 Rule for Audit Requirement: A retirement plan’s need for an annual audit is determined by counting participants with account balances on the first day of the plan year. The 80-120 rule is an exception that allows a plan with 80 to 120 participants to file as a small plan (no audit) … Continued

In Summary Risk of Tainted Assets: Directly merging plan assets preserves their source classification, creating a risk that previous qualification errors in the merged plan (resulting in “tainted assets”) could affect the audited financial statements of the successor plan. Rollovers Eliminate Risk: The optimal way to avoid tainted assets is by having participants conduct rollovers … Continued

In Summary Final Form 5500 Filing, Asset Distribution, and Legal Title: A plan’s final Form 5500 filing obligation is triggered not by the effective date of termination, but by the complete distribution of all assets. In a merger, the final filing is determined by the date the legal title of the assets transfers to the … Continued

Posted by Christopher J. Ciminera, CPA IKYMI: It’s with great pleasure that we congratulate Maria Hurd, CPA, RPA, our fearless employee benefit plan practice group leader and the guiding star for myself, Stacey Snyder, Saaib Uppal, Tyler Starr, and many others, for being recognized on Forbes’ List of America’s Best-in-State CPAs. This list is a … Continued