Looking to learn more about 401k Audits for Businesses in Chicago?
Businesses that have 401k plans for their employees in Chicago must complete Form 5500 annually. In some cases, the Employee Retirement Income Security Act of 1974 (“ERISA”) requires annual audits of plan financial statements by a qualified independent public accountant. In these cases, the audit reports must accompany the 5500 annual report filing.
Large Plan vs. Small Plan:
ERISA allows businesses with less than 100 eligible participants in the plan to file Form 5500-SF (Short Form) as a small plan and avoid a plan audit. However, if you have more than 100 eligible participants at the beginning of the plan year, the plan would be considered a large plan triggering the requirement for an audit.
Eligible participants include the following: active employees who are eligible to participate in the plan and are participating in the plan, active employees who are eligible to participate in the plan but have elected not to participate, terminated employees who have a balance in the plan on the first day of the plan year, retired former employees who still have a balance in the plan on the first day of the plan year and beneficiaries of deceased employees who are receiving or are entitled to receive benefits from the plan.
The 80/120 Rule:
Under the 80/120 rule, allows plans with between 80 and 120 participants, as of the 1st day of the plan year, to file the Form 5500 in the same category (large plan vs. small plan) as indicated on the prior year Form 5500 filing. For instance, if you had 70 participants last year and filed as a small plan, the plan can file again as a small plan in the following year as long as the plan has 120 participants or less.
Form 5500 is due the last day of the seventh month after the plans year end. Calendar year-end plans have a filing deadline of July 31st.
DHJJ is committed to performing high quality employee benefit plan audits in Chicago. DHJJ is a member of the American Institute of Certified Public Accountants’ (AICPA) Employee Benefit Plan Audit Quality Center. In addition, DHJJ is subject to peer reviews of our employee benefit plan audits.
Our clients have the peace of mind knowing they are working with professionals who are skilled and experienced in the unique requirements of employee benefit plan audits.
For more information about 401k plan audits in the Chicago Suburbs, contact Colin at 630-420-1360 or firstname.lastname@example.org.