Errors. They are everywhere if you look closely enough. But there are common themes in most plan errors that auditors of large plans come across every year. This article addresses the most common errors, why they occur, and how they can be avoided.
We have just finished another exciting season of auditing employee benefit plans at our firm. Like all the seasons before, we encountered a long list of issues with plans, some we had seen before and some we had not. As I look back at the issues, I can’t help but ask myself: Do plan sponsors read their plan documents? Do employers really care about plan administration for their 401(k) plans or do they just feel like they have to offer a plan to be competitive in the hiring market? Do participants ever look at their pay stubs or their 401(k) statements?
We don’t make the rules, why do the auditors have to be viewed as the bad guys? And the question that has nagged me for years… If we are finding these errors in the large-plan environments, what goes undetected in small plans? I try not to dwell on that one.
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This article was first published by Wolters Kluwer in the Journal of Pension Benefits, Spring 2018, vol. 25, no. 3.