401(k) Plan Audit Support

An annual plan audit is where a committee's documentation is tested in public. Old Slip Capital keeps that record in order for plan sponsors year-round, from 40 Wall Street, Floor 28, New York, NY 10005, so audit season is a retrieval exercise rather than a reconstruction.

What the auditor will want to see

• The plan document, adoption agreement and every amendment
• The Investment Policy Statement and committee oversight charter
• Dated committee minutes showing what was reviewed and why decisions were made
• Recordkeeper SOC 1 report, trust statements and reconciliations
• Payroll files, contribution remittance dates and census data
• Distribution, loan and eligibility files
• Fee disclosures and the most recent fee benchmarking results

The findings that recur

Late remittance of employee deferrals is the most common. Behind it: the wrong definition of compensation used for the match, employees who became eligible but were never enrolled, vesting applied incorrectly at distribution, and committee files that cannot show a prudent process was followed. Nearly all of these are operational errors with established correction paths — the expensive version is the one discovered late.

How we support the process

• Maintain the fiduciary record continuously in a secure online briefcase
• Coordinate document requests between the auditor, recordkeeper and TPA
• Review the investment and fee sections of the disclosures for consistency
• Help the committee respond to findings and document the remediation
• Fold recurring issues into the next year's plan and provider review

The audit is performed by your independent qualified public accountant. Old Slip Capital is an investment advisory firm and does not perform audits or provide legal, tax or accounting advice.

Common questions

When does a 401(k) plan need an audit?

A plan generally requires an independent audit attached to its Form 5500 once it is a large plan — historically counted by total eligible participants, and since the 2023 plan year counted by participants with an account balance at the start of the plan year, with 100 as the threshold and an 80-120 rule that lets a plan keep its prior filing status. Because the counting rules changed, some plans that once audited no longer need to. Your TPA or auditor confirms the determination each year.

Who performs the audit?

An independent qualified public accountant engaged by the plan sponsor. Selecting and monitoring that auditor is itself a fiduciary act, so the committee should document how the firm was chosen and review its experience with employee benefit plan audits specifically.

What do auditors typically ask for?

The signed plan document and every amendment, the Investment Policy Statement, committee minutes, the recordkeeper's SOC 1 report and trust statements, payroll and contribution records with remittance dates, participant eligibility and census data, distribution and loan files, fee disclosures, and the prior year's Form 5500.

What findings come up most often?

Late deposit of employee deferrals, using the wrong definition of compensation when calculating the match, missing or late enrollment of eligible employees, incorrect vesting on distributions, and thin or absent committee documentation. Most are operational and correctable, often through the IRS and DOL voluntary correction programs.

How does an advisor help with the audit?

We keep the fiduciary record the auditor asks for — the IPS, committee charter, dated minutes, fee benchmarking results and provider reviews — in an organized, secure fiduciary briefcase, and we coordinate with the recordkeeper and TPA so requests are answered once rather than three times. The audit itself is performed by your independent accountant.