Employee Benefits Blog

Posts tagged qualifying plan asset

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What are the audit requirements for Defined Benefit and Defined Contribution plans?

Generally, plans covered by the Employee Retirement Income Security Act of 1974 (ERISA) with 100 or more participants at the beginning of the plan year are required to file an audit performed by an Independent Qualified Public Accountant.

Plan sponsors should carefully review the definition of a participant in order to calculate the actual participant count. ERISA Section 3(7) defines a participant as “any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan that covers employees of such employer or member of such organizations, or whose beneficiaries may be eligible to receive any such benefits.” Under Internal Revenue Code Section 401(k) qualified cash or deferral arrangements, a participant also includes individuals who are eligible to participate in the plan, whether or not the individual elects to participate.