Audited financial statements are required for your 401K Plan when your plan is considered a large plan. The definition of a large plan is a plan that has 100 or more eligible participants at the beginning of the plan year. Participants are defined as; active participants in the plan, eligible employees that have not yet participated in the plan, separated or retired participants and beneficiaries. Large plans must have their 401K Plan audited by a CPA Firm and file Schedule H with their Form 5500.
There are a couple of exceptions to the audit requirement:
Keep in mind that if you had over 100 eligible participants at January 1, 2016 and you don’t meet one of the exceptions above you will be required to have a financial statement audit of your 401K Plan for the year-ended December 31, 2016 which is due July 31, 2017 unless you file for 2 ½ month extension. Penalties for filing a late 401K Plan audit can be very costly. If you think you might need a 401K Plan audit, based on the above criteria, you should seek a qualified CPA Firm with experience in 401K Plan audits.
The questions you need to ask to find a qualified CPA Firm to audit your 401K Plan:
Rules and regulations for 401K Plans by the IRS, DOL, ERISA and SSA are constantly changing. At GKG CPAs we have extensive training and experience auditing 401K Plans, Pension Plans, 403(b) Plans, ESOPs, and Health & Welfare Plans. If you know you need a 401K audit or are not sure now is the time to call us, we will be happy to help and guide you through the process.