Form 5500 Sans Audit Report

[austin3515]

The more I think about it, the email seems like a courtesy. I wonder how many of those emails that are sent relate to the sponsr at Bundled Provider, Inc. who just submitted without realizing the pdf needed to be attached.  I'll bet it;s a fair amount.  And then there are those that were legitimately late, but now that the audit is finished, the amended was never done.  That's also common.  We have definitely followed up with the auditors and gotten the response "oh we finished that 6 weeks ago!"

[Luke Bailey]

41 minutes ago, RatherBeGolfing said:

No reg cited in the emails

Interesting. Hmmh....

[RatherBeGolfing]

@Luke Bailey I have removed identifying and DOL contact information.  the below is the body of the email

Dear Plan Administrator

Our records indicate that you have failed to attach an Accountant’s Opinion, audited financial statements and accompanying footnotes to the above referenced 2021 Form 5500. Your Plan contains assets, liabilities and/or income and does not meet any of the exceptions to the requirement of attaching a report of an Independent Qualified Public Accountant. 

To avoid the U.S. Department of Labor’s rejection of this annual report and possible assessment of civil penalties against the Plan Administrator, you must amend the 2021 Form 5500 Annual Report and attach the required Accountant’s Opinion, audited financial statements, accompanying footnotes and required supplemental schedules.

[RatherBeGolfing]

3 hours ago, austin3515 said:

The more I think about it, the email seems like a courtesy. I wonder how many of those emails that are sent relate to the sponsr at Bundled Provider, Inc. who just submitted without realizing the pdf needed to be attached.  I'll bet it;s a fair amount.  And then there are those that were legitimately late, but now that the audit is finished, the amended was never done.  That's also common.  We have definitely followed up with the auditors and gotten the response "oh we finished that 6 weeks ago!"

That has been my interpretation of the email, its just a courtesy.  Very similar to the DOL emails that let you know the DOL expected a return but do not have a record of one being filed.  When those started going around, ARA had to confirm with DOL that the emails did not count as being notified in writing by DOL of a failure to file a timely report (which would make you ineligible for DFVCP)

 

[RatherBeGolfing]

21 hours ago, Luke Bailey said:

austin3515, I had a similar experience a few years ago. The 45 days is statutory and also in the regs. DOL has to give it to you for purposes of its penalties. I think the 45 days runs from the date of their letter, not the date the 5500 should have been filed. Does the letter make this clear one way or the other?

You can find some good info in the Reporting Compliance Enforcement Manual.  That said, there is a disclaimer on an earlier page that states that the manual is for internal use only and does not confer on any person a right to rely on any policy or procedure therein.  So, its strictly for our reading pleasure.

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/enforcement/oca-manual/chapter-8

Chapter 8 lists letter types and I believe what we are discussing is a notice of rejection.

Notice of Rejection

NOR Defined

Which Cases	The NOR is used on deficient filer cases.
Analyst Action Period	If first correspondence: Within 15 days of assignment if a merge file for automatic letter generation has been created. If no such file exists, then 30 days from assignment. If Inquiry was issued: Within 30 days from the receipt of a response or the expiration of the response period, whichever is less.
Preceded By	The NOR can either be preceded by an Inquiry letter, or be the first correspondence.
Followed By	A closing memo and Notice of Satisfactory Filing if the issues are resolved. Otherwise, a Notice of Intent to Assess a Penalty.
Response Period	The filer has 45 days from the date of the letter.
Closing Reasons	Administrative, Bankrupt/Terminated, Undeliverable, No Deficiency, Filer Has Demonstrated that the Filing Was Satisfactory, A Filing Was Not Required.
Certified?	The NOR is ALWAYS mailed certified or overnight delivery. The green card or other proof of delivery must be attached to the letter.
Dated?	The NOR is not dated by the analyst, unless instructed otherwise.
Signed By	The analyst
Review Block?	Yes

As with all letters, the official template is located on the L drive. It is required that this version be used. Usage of different versions may result in the case being returned to the analyst.

The purpose of issuing the NOR is to notify filers of deficiencies in their annual report filings submitted to the Department and to afford them the opportunity to voluntarily comply with the required rules and regulations. The goal is to receive an acceptable amended annual report filing without advancing to the next level of correspondence, which may result in penalties.

If an Inquiry letter was issued on a Deficient filer case, and a satisfactory response is not received within the required time period, the next step is the issuance of a NOR. The NOR includes all the reporting and disclosure deficiencies noted by the analyst.

The NOR requires a response from the plan administrator within 45 days of the date of the NOR. The 45-day period is statutorily required pursuant to Section 104(a)(5) of ERISA which provides the plan administrator 45 days to submit a revised annual report filing satisfactory to the Department of Labor before any further enforcement action can be taken.

Upon receipt of a response to the NOR, the analyst shall perform a review of the information submitted to determine whether:

• The plan administrator has corrected all of the deficiencies cited in the NOR and submitted an acceptable amended annual report filing; and
• The response was received timely, within 45 days of the date of the NOR. It is the policy of OCA to use the postmark date of the response to the NOR as the receipt date.

If all of the deficiencies cited in the NOR have been satisfactorily corrected, the analyst will close the case and prepare a Notice of Satisfactory Filing and a Case Closing Memo.

If the plan administrator fails to respond to the Notice of Rejection within the 45-day period, or fails to provide a revised annual report filing satisfactory to the Department, the analyst will issue a Notice of Intent to Assess a Penalty. This also applies if the filer sends the correction after the 45-day response period but before the NOI has been issued.

 

[Peter Gulia]

Another retirement plan’s administrator that filed a Form 5500 report on 2021 without an independent qualified public accountant’s opinion is Trump Payroll Corp., the sponsor and administrator of the Trump Payroll Corp. 401(k) / Profit Sharing Plan.

See pdf page 22 of 23.

(I didn’t look for this; I stumbled across it while searching for a different plan.)

Trump Payroll Corp 401k 2021 5500 20221017112257NAL0029732609001.pdf

[Kansas401k]

I'm jumping on this thread because it's the most similar situation I can find already addressed on benefitslink. 6/30 PYE 5500 is due April 15. Audit is not complete - only because the TPA's SOC-1 is not complete. Any relief here for the plan sponsor when it's out of their control? I'm assuming no but throwing this out there for input. Thanks. 

 

[RatherBeGolfing]

8 hours ago, Kansas401k said:

I'm jumping on this thread because it's the most similar situation I can find already addressed on benefitslink. 6/30 PYE 5500 is due April 15. Audit is not complete - only because the TPA's SOC-1 is not complete. Any relief here for the plan sponsor when it's out of their control? I'm assuming no but throwing this out there for input. Thanks. 

 

So 6/30/22 PYE and most recent TPA SOC covers 1/1/21-12/31/21?

1.  TPA can get gap letter to cover 1/1/22-6/30/22

2. IQPA can make a note that it wasn't available yet

3. Question why the IQPA requires the TPAs SOC. Plenty of small TPAs don't have a SOC audit and work on large filers.

[Bill Presson]

15 hours ago, RatherBeGolfing said:

So 6/30/22 PYE and most recent TPA SOC covers 1/1/21-12/31/21?

3. Question why the IQPA requires the TPAs SOC. Plenty of small TPAs don't have a SOC audit and work on large filers.

If the TPA is running the daily val platform, that would be the reason.

[austin3515]

Not having a SOC1 in and of itself doesn't mean they cant finish the audit.  It just means they can't place any reliance on the recordkeepers controls and have to do more testing.  Obviously no one wants to do that, but that's an important distinction in terms of why the client isn;t able to file the audit report.  

Not to be confused with the fact that I would not finish the audit either (if I was the auditor), I would want to wait for the SOC1 to be finished. If the DOL comes calling, I would not hesitate to throw the recordkeeper under the bus.

I agree a traditonal TPA (such as yours truly) doesn't have a SOC1 (we're not doing high volume/systems heavy work).  So if they are waiting for a plain vanilla TPA to produce a SOC1 they'll be waiting a long long time!  We definitely get asked for our SOC1 all the time so it's a common question.