Your 401(k) plan management team, including the plan administrator and trustee, are in charge of the establishment and maintenance of the plan’s internal controls. The plan management team is also responsible for the presentation of available net assets for benefits and other plan financial statements.
Management is also accountable for the implementation of effective internal control to make sure that investment performance is monitored and reported accurately so that corrective action can be taken if needed.
401(k) Plan Investment Review
The review process should include a sufficient understanding of:
- the investment strategy,
- the plan investments, lineup and
- the methods used by fund managers to meet the stated investment strategy.
Internal accounting reconciliations by plan administrators should be done regularly to ensure the plan balances reported to participants are accurate. This allows for any errors to be identified and corrected in a timely manner.
401(K) PLAN Monitoring and Reconciliation
Items to be included in the plan review should include:
- Reviewing the valuation to ensure to plan investments are measured at fair value or contract value.
- Ensuring gain/loss on investments is reported properly.
- Ensuring participant balances are accurate
- Ensuring plan contributions are properly bonded.
- Reviewing applicable agreements, policies, and/or plan documents to ensure accounting and assessment of administrative expenses are allocated correctly.
- Review disbursements to ensure they are properly recorded to the participant account.
- Internal plan participant records are compared to the totals from the trust reports on a regular basis.
- Review plan participant deferral amount and compare them to recorded participant requests.
- Review the required annual filings and reporting for timeliness and accuracy.
- Review all financial reports and filings periodically.
Retirement plans can be very complex. Anders specializes in retirement plan audits. If you would like to discuss our audit process in more detail or need an audit request a free consult below. We can help you navigate the world of 401(k) audits proficiently. We also offer off-site assistance and flat-fee pricing so there are no surprises when the job is complete. For assistance, contact the team at (314)-886-7913 to talk about your 401(k) audit needs.All Insights