Certified Audit

[bzorc]

I administer a 403(B) plan that has an employer matching contribution, as well as an employer discretionary contribution feature. The investment product is a group annuity contract. I have been filing 5500's for this plan because of the employer contribution aspect. The eligibility for 403(B) deferrals is immediate, while for the employer contributions it is age 21 with one year of service. Because of the immediate eligibility, my beginning of the year participant count is 108, so I get a pass on large plan reporting (Schedule H). However, if I added 13 eligible participants on 1/1/02, is a certified audit (albeit a limited scope audit) required? I have no idea, and thought the client should be warned if an audit is needed for 2002.

Any replies would be helpful. Thanks.

[jpod]

Check the instructions. I believe that you only need to answer questions 1-5 and 8 on the 5500, regardless of the number of participants; no schedules and no audit.

[bzorc]

That's what I thought too, but an associate feels that the full 5500 (with related schedules) needs to be prepared because of the employer contribution aspect. Are we wrong?

[mbozek]

There is no audit because 403(B) assets are not held in trust.

[MWeddell]

The Form 5500 instructions make clear that no audit is required.