With few exceptions, the Employee Retirement Income Security Act (ERISA) requires any company with more than 100 eligible employees to complete and submit audited financial statements annually as part of its obligation to file an annual return (IRS Form 5500 Series). That doesn’t mean you have to have more than 100 participants enrolled in your plan, just that they are eligible. There are some provisions within ERISA that allow the scope of the audit to be limited, so it’s best to check with your employee benefits advisor. However, in most cases a comprehensive audit must be completed annually.
The Department of Labor (DOL) is quite diligent in making sure all qualified plans are audited and also in reviewing audits to ensure that plans are being properly administered to the employees. This audit requirement allows the DOL to ensure that employee benefit plans are being executed in accordance with government standards as well as following the provisions outlined in the plan documents.
If your company has a benefit plan, such as a 401(k) with 100 or more eligible participants, you are required to have an audit performed on that plan annually. Learn more about more about Employee Benefit Plan Audits in Skoda Minotti’s free e-book: What to Expect from Your First Employee Benefit Plan Audit.