2023 Employee Benefit Plan Audit Requirement Changes
Background
The Department of Labor (DOL) requires sponsors of employee benefit plans subject to the annual Form 5500 to include an audit report from an independent qualified public accountant. There is an exception to this requirement for those with fewer than 100 plan participants at the beginning of the plan year.
Old Rule
The old rules required plans with 100 or more eligible participants at the beginning of the plan year to be audited. That meant eligible employees were included in the count to determine the audit requirement even if they were not participating.
New Rule
On February 23, 2023, the DOL issued a pair of Federal Register Notices announcing changes to the 2023 Form 5500 instructions for plan years beginning on or after January 1, 2023. One of the key changes is how the participant count is now determined. The deciding number is still 100 plan participants, but it will now be based on the number of participants with account balances at the beginning of the plan year.
Next Steps?
Contact your trustee or record keeper to determine if your plan requires an audit under the new rules. If an audit is necessary, contact your audit team and be sure to get on their schedule.
Other changes affect employee benefit plans because of the SECURE Act 2.0 (the Act) signed into law at the end of 2022. Passed as part of the Consolidated Appropriations Act of 2023, the Act calls for multiple changes to the current retirement plan and savings rules to make it easier for workers to access and participate in employer-sponsored retirement plans.
Since these changes will be implemented over the coming years, becoming familiar with those effective for 2024 is essential. Changes effective for 2023 are covered in this article.
Click here for a deeper dive into the topic.
We’re here to help
If you have questions about the information outlined above or need assistance with your plan audit, JLK Rosenberger can help. For additional information, call 818-334-8645 or click here to contact us. We look forward to speaking with you soon.
