employee benefit plan compliance

Employee benefit plan compliance requirements are always changing, which can make it difficult for plan sponsors and administrators to stay up to date. We’ve included summaries of recent changes and links to more information to help you stay informed and keep your plan operations in compliance.

DOL Provides EBP Best Practices

Employees work hard to save for their retirement, and it’s vital participants receive those benefits. Locating missing or non-responsive participants or beneficiaries can be a difficult task for many EBP administrators. The Department of Labor’s Employee Benefits Security Administration (EBSA) recently updated its guidance for plan best practices. Plan sponsors should implement effective policies and procedures to maintain complete census information and to communicate with retiring or terminating participants of their eligibility for benefits. EBSA lists several red flags that could be indicators of a problem with missing participants in the following article along with best practices developed from its investigations:

Significant Retirement Plan Changes for 2021 Audits

With the issuance of SAS No. 136 by the AICPA’s Auditing Standards Board, there are new performance requirements for ERISA plan financial statement audits and changes to the auditor’s report. SAS No. 136 is meant to improve auditor performance and enhance the quality of EBP audits, as well as increase the value and transparency of the auditor’s report. The change is effective for audits for periods ending on or after December 15, 2021, and will be applicable for plans with years ending December 31, 2021, or later.

Audits that are currently referred to as limited scope audits will be known as ERISA Section 103(a)(3)(C) audits. These audits will no longer be considered as having a scope limitation, and the auditor will follow new performance and reporting requirements. Accordingly, the auditor will no longer issue a disclaimer of opinion but instead would issue an ERISA Section 103(a)(3)(C) auditor’s report in accordance with AU-C Section 703.  This report contains a two-pronged opinion that is based on the audit and on the procedures performed relating to the certified investment information. The link at the bottom includes illustrations of the new report.

In SAS No. 136, there are several key changes that affect plan management, including acknowledgment in the audit engagement letter of certain responsibilities, such as:

  • Maintaining a current plan instrument;
  • Administering the plan in accordance with the plan’s provisions;
  • Provide the auditor with a substantially complete draft of Form 5500 prior to the date of the auditor’s report; and
  • If electing an ERISA Section 103(a)(3)(C) audit, the certification of investments meets certain requirements.

The AICPA’s Employee Benefit Plan Audit Quality Center (EBPAQC) has developed a tool, “Conditions for plan management to elect an ERISA Section 103(a)(3)(C) audit,” to assist plan management in determining whether the conditions to elect an ERISA Section 103(a)(3)(C) audit have been met:

Your auditor may request additional information from you in order to perform the plan audit under the new standard, which may result in the need for you to spend more time preparing for your plan audit in 2022.

Click here to learn more about the new standard and the requirements for plan management and auditors:

Anderson ZurMuehlen’s Employee Benefit Plan Specialty Team keeps up to date on the latest guidance. If you have questions about implementing best practices or preparing for your 2021 plan year-end audit please contact us.

This post was written by Linsay Carlson, CPA and Team Lead of the Anderson ZurMuehlen Employee Benefit Plan Specialty Team. Linsay is located in our Butte office.


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