Barbri: Late Contributions and Operational Errors in 401(k) Plans: Correction Programs and Audit Considerations

Late remittance of employee deferrals and loan repayments remains one of the most frequently reported audit findings. Small plans with less than 100 participants must make retirement deposits within seven business days of a pay date. Large plans, those with 100 or more participants, must make the deposit as soon as the funds can reasonably be segregated from the employer’s general assets. Ensuring these deposits are made on time is a critical step in a 401(k) plan audit.

Other operational failures commonly identified during these audits include incorrect determinations of plan compensation, missed or miscalculated matching contributions, eligibility and enrollment errors, and improper application of forfeitures. EBP auditors must not only identify, document, and correctly calculate contributions but also be able to assist with the implementation of procedures to reduce recurring compliance failures.

Listen as our panel of accomplished employee benefit plan specialists provides a practical framework for identifying, evaluating, and testing late contributions and other operational errors in 401(k) plan audits, and discusses evaluating correction alternatives under current DOL and IRS guidelines.