FHLLC Brochure

FILE WITH CONFIDENCE

Employee Benefit Plan Audits
and 5500 Filings

Are you required to file a Form 5500 and attach an
independent audit for your plan? Find out now.

HEALTH & WELFARE PLANS RETIREMENT
PLANS
Does the plan, fund or program provide one
or more of the following benefits? 401(k), 403 (b)
Pension plans
Active Employee Benefits Money purchase
Health, Dental, Vision, Life Insurance, Profit sharing
Temporary Disability, Long-Term Disability Employee stock
ownership
Post-Employment (and Pre-Retirement) Benefits
COBRA benefits These lists include
Severance only the most
Long-term or short-term disability common plans.
Supplemental unemployment benefits

Post-Retirement Benefits
Health, Dental, Prescription Drugs, Vision, Life Insurance

p100 participants or more Under 100 participants

plan is funded plan is unfunded plan is funded plan is unfunded
or fully insured or fully insured

Form 5500 + Audit Form 5500, No Audit May Be Exempt

BE PROACTIVE

Think your plan
may be exempt?

Check with a
knowledgeable
compliance analyst

to be sure.

POSSIBLE IT’S THE LAW
EXEMPTIONS
ERISA (The Employee Retirement
Some health and welfare plans are exempt Income Security Act) was signed
from filing a Form 5500 and/or performing into law in 1974. The law is meant
an audit: to protect employees by ensuring
that EBPs (employee benefit
3 Unfunded plans plans) are non-discriminatory and
3 Fully insured plans managed properly. Plan sponsors
3 Combination unfunded/fully insured plans are therefore required to report
3 Plans for select higher-level employees information about most plans
3 Employer-sponsored day care centers and their activities to the DOL
3 Select cafeteria plans (Department of Labor), as well as
3 Plans not subject to ERISA the IRS (Internal Revenue Service),
3 Other, less common plans using Form 5500. Many plans
also require an independent audit
performed by an independent
qualified public accountant.

Disclaimer: The information presented herein is for general information only, and does not expound on the different variables
inherent in any given situation. Consult with a qualified professional before making any decisions.

THE RECENT “ Substandard
CRACKDOWN audit work can
be costly to plan
Recent advances in technology have made it administrators
easier for the DOL to focus intensely on audit and sponsors
quality and compliance, and they noticed a ... a recent study
disturbing trend. Many plan sponsors were conducted by the
failing to meet their basic reporting obligations! Department of
Additionally, a significant portion of the Form Labor found serious
5500s and audits that were filed contained serious problems with nearly
errors or omissions, resulting in severe penalties. 40% of employee
Cursory inquiries explained the reason for this. ”benefit plan audits.

Many companies were relying on their own Emailed notice from the
accounting departments to complete Form 5500 DOL urging businesses to
and hiring auditors who were unprepared for this select qualified auditors
highly regulated work. Even worse, there were with expertise in employee
some plan sponsors who were unaware of their benefit plans.
fudiciary responsibilities, and had gone for years November 13, 2015
without filing the Form.

Given the DOL’s increased vigilance and the very
slim margin for error, astute plan sponsors are
now carefully selecting auditors who specialize
in EBP compliance regulations.

Beat the Letter!

While the penalties are steep, there’s some good news for companies that have been
remiss in their reporting obligations.

If you come forward and rectify missing or incorrect reporting, you can take advantage
of an amnesty program designed to encourage voluntary compliance. The maximum
penalty levied will be $2,200 annually, with a $4,000 cap.

On the other hand, if the DOL flags your plan and sends you a notice of non-compliance,
you may be fined a maximum of $15,000 by the IRS, and $2,063 per day by the DOL, with
no cap. Bottom line: Stay a step ahead; it’s worth it.

What Fasten Halberstam LLP
will do for your company:

BEFORE YOU SET UP A PLAN

It’s a good idea to consult with a compliance analyst before you implement a
new employee benefit plan or program. We can review your plan document and:
3 explore plan structuring options that can streamline annual reporting
3 ensure that no prohibited transactions are included
3 guide plan sponsors and record keepers in maintaining internal controls and

necessary documentation

IF YOU’VE MISSED THE DATE

Form 5500 and audits are due seven months after the end of the plan’s fiscal year. For plan
years ending December 31, that would be July 31.
If you haven’t filed a Form 5500 or had an audit done in time, we can:
3 minimize penalties for non-compliance
3 assist in compiling documentation
3 prepare all delinquent Form 5500 filings
3 provide a high-quality audit that meets

DOL standards

Fasten Halberstam Audit Department

We’ve streamlined the audit process to
require minimal involvement on your part.

INITIAL MEETING

We gather information about participants, assets,

Us liabilities, contributions and expenses.

The first audit: The first time we review a plan, we’ll

Client compile details regarding plan members, contributions,
distributions, expenses, assets and internal

controls. We save all that information to expedite

the processing of future audits.

ACldamimins PHrRovider WE WORK AT OUR LOCATION

We communicate with the claims administrator,

record keeper, payroll company and human

Payroll Co Record Keeper resource provider. Electronic communications
and drafts simplify the process.

WE MEET AT THE END

You receive your company report, including the

Us Client annual review and SAR for participants.

The SAR (Summary Annual Review) informs
participants of the plan’s status. This report is a
DOL requirement, and it must include specific content.

Hiring the right audit firm is liberating.

“We found the MEET DAVID STERN
audit process
quite friendly. AUDIT PARTNER
David guided us
so clearly that it David has more than 10 years of experience
was like Audits developing client relationships and providing
for Dummies.” outstanding service. His specialty is auditing
employee benefit plans, and he is well versed in
–IZZY WOLFF the complexities that may be present in a wide
Director of Financial Operations, range of plans. He is a member of the AICPA’s
Centers Health Care EBPAQC (Employee Benefit Plan Audit Quality
Center), as well as the New York State Society of
CPAs EBC (Employee Benefits Committee). David
regularly attends seminars and workshops to keep
abreast of any changes in reporting requirements.
Prior to joining the firm, David worked for several
tristate area CPA firms, including BDO Seidman
LLP and Roth & Company LLP.

David personally handles all EBP audits at Fasten
Halberstam LLP. Fasten Halberstam is a full-
service accounting firm with over 25 years of
experience in all areas of accounting, taxation
and business consulting.

Have a question for David? Just ask.
(212) 751-8337 x106
[email protected]

30 Broad Street, Suite 2204
New York, NY 10004

Tel: 212-751-8337 Fax: 718-799-5576
[email protected] www.fhllp.com

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