The Department of Labor Increases Its Focus on Plan Sponsors

In November, Did You Receive an Email from the Department of Labor (DOL)?
The email was sent to all plan administrators whose plans are required to have an annual financial statement audit. The DOL sent the email because they are concerned with safeguarding every benefit plan’s assets and trying to ensure plan sponsors are aware of, and fulfilling, their ERISA reporting and fiduciary responsibilities.

What Did the DOL Email Say?
The email encouraged plan sponsors to look at the quality of your employee benefit plan auditor. The DOL did a study of 400 plan audits and their results revealed significant quality concerns. 200 of those plans were audited by firms doing 5 or less employee benefit plan audits. The main highlight was there was a 40% failure rate on plans the DOL inspected. This raised a series of questions that the DOL is trying to help plan sponsors answer so their plans are not compromised. As a plan fiduciary you need to ask:

  • Is your plan auditor qualified?
  • Do they audit dozens of plans or just a handful?
  • Is your plan auditor getting employee benefit plan specific continuing education?

Our Credentials
The DOL made it clear that a benefit plan audit requires different skill sets than a traditional financial statement audit. Salmon Sims Thomas performs 35 plus employee benefit plan audits annually. We are a member of the AICPA Employee Benefit Plan Audit Quality Center, which requires us to meet strict educational requirements and implement benefit plan specific quality control procedures. We know what questions to ask and where to look for deficiencies in a plan.

Let Us Help
Our experience in this niche plan audit service area is deep. If you have not evaluated and documented your investment advisor, third party administrator and record keeper, then you may have exposure. Your employee benefit plan auditor cannot conduct those investigations, but they should have informed you to do so and consulted with you along then way. If they have not, talk to us.

To Learn More
Please contact me to find out more about our employee benefit plan audit practice.

Dalton Cox, CPA
Salmon Sims Thomas