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Benefit Plan Audits: Be Ready!

Practice Management

Compliance is serious business and audits of an employee benefit program are no joke. But the mere fact that one is scheduled need not spell imminent doom. As a recent blog entry points out, there are steps one can take to be ready — and, in the process, better ensure that the plan is in compliance.

In “Preparing Your Benefit Plan for an Audit” consulting firm Windes offers ideas on steps that an administrator may consider taking that would help a plan to be ready in advance just in case one may happen. And even if an audit never takes place, these steps could help the plan to be more fully in compliance with relevant laws and regulations.

Verify that:

  • payroll settings are consistent with plan compensation as the plan document defines it;
  • the employer contribution, including any match calculations, follows the plan document;
  • the employer contribution matches the amount on the census and the amount deposited with the recordkeeper;
  • compensation, employee deferrals and employer contributions equal what is tested in annual nondiscrimination testing; and
  • the total employee plan withholdings in the payroll records agree with the amount on the census and the total withholdings deposited into the plan.


  • current and past signed plan documents;
  • plan contracts with service providers and trust agreements;
  • all enrollment forms, beneficiary designations and participant elections for deferrals and investments; and
  • minutes of plan committee meetings, discussion, and decisions so as to document that it is performing monitoring functions appropriate to a fiduciary.


  • keep a remittance schedule that tracks when employee contributions and loan payments were withheld and when those funds were remitted to the plan; and
  • review and monitor deposits to ensure they are remitted to the plan on time and are properly allocated to participants’ accounts.


  • determine whether the plan should be filing a Form 5500 as a small plan or large plan; and 
  • educate employees who are involved with payroll on plan compensation to help make sure plan withholding is correct for all types of payroll.