A competent auditor with a specialization in ERISA plan audits (“specialist CPA” going forward) can bring significant value to an audit client. But specialist CPAs can bring similar value to a pooled plan provider (PPP) when setting up a new PEP. In this article, we identify just five ways a specialist CPA can add value for both new and existing PEPs.
Advising on timeliness of contributions. A critical requirement under ERISA is for plans to remit contributions on a timely basis. A specialist CPA can advise PPPs on how best to document the timeliness of remittances to satisfy DOL and external auditors. Moreover, they can advise on developing controls to detect and correct any late remittances proactively, before the auditors even arrive.
Being ready for audit requests. When plan providers are unable to provide auditors with needed support it is a huge source of frustration for participating plan sponsors and can lead to last-minute or even late Form 5500 filings. A specialist CPA can help a PPP be ready in advance to provide the reporting and documentation an auditor will eventually need.
Collecting contributions and the SECURE Act. Section 105 of the SECURE Act permits PEPs to designate a named fiduciary to collect contributions. But the Act requires PEPs to implement written collection procedures that are reasonable, diligent, and systematic—something a specialist CPA can readily assist with.
Documenting internal controls. As auditors increase their scrutiny of PEPs, there will be more focus on their internal control environment. A specialist CPA can advise on establishing and documenting the right key controls.
Plan design. Plan design features provide great flexibility, but they also introduce risks and create opportunities for operational errors. A specialist CPA can be key during the plan design phase in identifying such risks and how they might be mitigated, enabling providers to make more informed choices.
HOW A SPECIALIST CPA CAN HELP IN SETTING UP YOUR NEXT PEP (AND HELP YOU STAND OUT FROM THE COMPETITION)
- Being proactive about remitting contributions
- Being audit ready
- Complying with the SECURE Act
- Documenting internal controls
- Making informed plan design choices
EXISTING PEPS—IS IT TOO LATE?
If your existing PEP is facing any of the above issues, it is not too late to make fixes. A specialist CPA can help plot a path forward.
THE BOTTOM LINE:
Setting things up right (or fixing them properly, if your PEP is already underway) will pay dividends for PPPs who take the time to do so.
Don’t underestimate the cost in real dollars and reputation to ignoring the items discussed above (and others). Specialist CPAs can be of tremendous help in establishing the policies, procedures, and controls that will ensure that your PEP shines.
