Beginning with the 2009 Form 5500 filings (due in 2010), employee benefit plans that are qualified under section 403(b) of the Internal Revenue Code that are sponsored by charitable organizations and covered under the Employee Retirement Income Security Act of 1974 (ERISA) will be subject to the same reporting and audit requirements that currently exist for section 401(k) plans.
What does this mean for affected organizations? It most likely means that they face significant challenges with:
- Establishing plan accounting records and proper controls
- Identifying all participant accounts to be included as plan assets
- Determining beginning account balances (i.e. – comparative balances are also required as of December 31, 2008 for calendar year plans)
- Obtaining other financial information to be included in the plan’s financial statements
- Obtaining an unqualified opinion on the plan’s financial statements from an independent auditor.
If you are affected by these new regulations, we recommend that you review “403(b) Plans – 2009 Frequently Asked Questions.”
For more information on employee benefit plan audits, please leave a comment below, or contact Dani Gisondo at 440-449-6800.