Choosing the Right Auditor

White Nelson Diehl Evans is a large firm with a wealth of experience performing employee plan audits. We are a member of the American Institute of Certified Public Accountants’ Employee Benefit Plan Audit Quality Center, which holds us to high standards that demonstrate our commitment to audit accuracy and quality. The Audit Quality Center assists CPA firms in improving the quality of ERISA audits.

We attend the annual AICPA/DOL conference that addresses the latest trends regarding employee benefit plans. We also keep abreast of all relevant FASB pronouncements, which are ever changing, and we are members of the BDO Alliance, giving us access to a wealth of materials concerning employee benefit plans. Our company periodically performs internal staff training in ERISA plans to ensure all employees are aware of the latest developments. In short, White Nelson Diehl Evans constantly stays up-to-date on all the professional and technical guidance involving ERISA audits.

We believe our ERISA audit clients receive exceptional service, for a number of reasons:

  • We have the experience and expertise gained by doing a significant number of ERISA audits.
  • We understand how to fairly value plan assets.
  • When testing contributions, we consider the plan’s definition of compensation.
  • We have never received an unfavorable peer review report.

In addition, clients benefit from our professional conduct and high standards. We always give our clients expected completion dates and perform our retirement audit engagements in single blocks that run as efficiently as possible. . At the start of the audit, we assess our clients’ internal control processes and share our recommendations for improvements as quickly as possible.

Avoiding Risk

Any company with at least 100 employees must, by law, have its ERISA plans audited every year. Unfortunately, the fact that ERISA compliance is mandatory often causes companies to concentrate more on finding the lowest-cost auditor rather than focusing on getting correct results. The U.S. Department of Labor has performed almost 3,500 civil investigations of ERISA audits since 2011 and has found more than 75 percent required corrective actions. It is unfortunate when companies try to save a little money on audit fees only to expose themselves to the risk of large penalties for insufficient or untimely results.

Small CPA shops with little experience in ERISA auditing often make errors in various areas of the audit. For example, a large area for DOL comments is with regard to defining compensation and benefit calculations. Miscalculating compensation often arises from confusion about commissions, bonuses, car allowances and other types of compensation. These miscalculations affect employee plan contribution amounts, and the DOL frequently reviews this area of ERISA audits. The DOL also searches for delinquent remittances of employee contributions, prohibited transactions and other noncompliance issues. Plan administrators, company directors and officers are directly responsible for plan mismanagement, and sanctions of up to 20 percent of plan assets may be assessed by the Internal Revenue Service and the DOL.

Your auditor should provide you with the standard audit report upon completion of an engagement. White Nelson Diehl Evans also provides a management letter where we proactively discuss any weaknesses in our clients’ ERISA plans. Unlike some CPA firms, we always strive for a user-friendly experience and complete information sharing.

Checking Against Benchmarks

ERISA plan administrators have the fiduciary responsibility to ensure that the plan is making appropriate investments, that the investments are performing adequately and that fees are in line with industry standards. Typically, an employee will divide contributions among several mutual funds and the plan will pay a fixed percentage for management fees. Through our benchmark efforts, we can identify when or if an plan has fees in excess of DOL guidelines..

Often, an employer doesn’t have a full understanding of the fees for the funds it offers in its plan. For example, many high-fee mutual funds offer marketing commissions to the broker who recommends them. In addition, many these funds also collect 1 percentadditinoaladditional administrative fees from the employee’s earnings that are not always transparent in the trust statements. The result has been several high-profile lawsuits with significant employer obligations to the participants and a directive from the DOL to have employers disclose the fees they pay for ERISA plans.

White Nelson Diehl Evans prepares benchmarks indicating what is adept at identifying problem areas where the plans have been paying for different mutual funds, elevated fees and is happy to recommend lower cost alternatives and facilitate contacts with fund managers or advisors. We frequently make referrals to investment advisors and/or plan administrators regarding funds that perform well and charge low fees where opportunities exist to lower the administrative burden of these plans.

Perspectives
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For financial accounting and audit services relating to an ERISA Plan, contact White Nelson Diehl Evans by filling out the short contact form or calling us at the number above.

ERISA Employee Benefit Plan Audit Overview

At White Nelson Diehl Evans, we know how difficult it is to stay ahead of the complex and dynamic tax laws. From new standards changing revenue recognition rules to the impact of the Affordable Care Act, our goal is to help our clients stay in front of tax issues that impact your bottom line. To help in this effort, we have put together a comprehensive tax-planning guide and it’s available to download for free.

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Partner Testimonial

“At WNDE, we have a large ERISA audit practice, conducting a substantial number of benefit plan audit engagements each year. We are keenly aware of the increased regulatory oversight that the DOL has placed on these plans, and their fiduciaries. We go well past a simple “check the box” on audit compliance, and strive to assure that our clients are both aware of, and meeting, their extensive plan fiduciary responsibilities."

Brian Wilterink Audit Partner