sbutler

Client had DOL audit and is filing a VFCP with the DOL. Do they also have to file SCP with IRS for the same issue (late remittances)?

In the same vein, can an owner maintain a SEP IRA, for him only, if all of his employees are covered by a PEO 401(k) plan?

Is a self-funded plan allowed to rent hotel meeting rooms to hold enrollment meetings? The plan has participants in multiple contractor sites across a state, so they don't have their own buildings in those locations.

Along the same line, I have a LLC (husband/wife partnership) which made only a PS contribution for 2011. Trouble is, they only had passive income for 2011. And to compound it, they rolled the whole amount into IRA's in January. How do we fix this? Excise tax apply?

They are subject to the audit requirements. The trustee was balking because the trust document will need to be changed. For audit purposes it seems it would be easier to have the trustee account for all of it. It would also seem to clarify for the sponsor just what the "plan" is. Thanks for the response.

A client has a self-funded medical reimbursement plan and trust for rank and file employees. They have wrapped their fully insured benefits for the management classes into the self-funded plan. The question we have is should they now remit the insurance premiums to the trust or can they still remit them directly to the insurer? What are the pros and cons?

I have a client whose group insurance benefit is different for different classes of employees. The classes are based upon hours worked for the previous quarter. Most of the employees work under short-term government contracts so their hours can vary widely quarter to quarter. The employer has determined they are going to place employees in the class they estimate they would be under. What are the penalties for non-compliance with the plan docs? What is the remedy they will have to employ?

"AICPA Audit & Accounting Guide - Employee Benefit Plans 6.22 Benefit plans are increasingly using service providers to initiate, execute and perform the accounting processing of transactions on behalf of the plan administrator. Often the plan does not maintain independent accounting records of such transactions. For example, for 401(k) plans, many plan sponsors no longer maintain participant enrollment forms detailing the contribution percentage and the investment fund allocation option. For health and welfare plans, often claims are submitted electronically from the health care provider directly to a claims administrator for adjudication and payment. In these situations, the auditor may not be able to obtain a sufficient understanding of internal control relevant to such transactions to assess the risks of material misstatement and design the nature, timing, and extent of further audit procedures without considering those components of internal control maintained by the service organization. This understanding can be efficiently achieved by obtaining and reading the entire document prepared in accordance with SAS No. 70 for the service organization. SAS No. 70 reports generally cover the relevant operations of a service organization; however, certain operations of the service organization may not be addressed in the SAS No. 70 report, and those operations may be significant to the plan audit. In these instances, the engagement team will need to obtain an understanding of the controls in the relevant areas excluded from the scope of the SAS No. 70 report." Emphasis added. Both the above guide and the Employee Benefit Plans Strategic Briefing include "recordkeeping" and "benefits administrators" so it covers TPA's. I agree that a SAS 70 report is not required. But with VRUs and automated loan processing, etc., plan administrators/sponsors just do not have any control over these transactions (that is why they have a TPA). As these transactions are a significant part of a plan's internal control they must be tested. Without a SAS70 Type II report on the TPA covering, say, participant investment allocation, how can a plan satisfy me as an auditor that participants balances are correct? Dell's answer is absolutely correct.

I have a 401(k) invested in the Wells Fargo Stable Value Fund S. I know the financial statement valuation is contract value. What value should Sch H, line 1©9 be at? Per 5500 instructions it is current value, but Wells is reporting it at contract value.