A Few Words
Pension accounting in NYC. When you set up a retirement or pension audits program for your business, be aware that the IRS and the Department of Labor (DOL) both oversee retirement plans. These agencies often work together to make sure that your company is managing your retirement and pension plans to the benefit of your employees who participate in them. So whenever you decide to set it up, that’s the time to bring in a qualified pension accountant to make sure the plan can pass muster.
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The IRS gets involved with retirement and pension audits plan primarily to look at issues pertaining to the eligibility, distribution and participation of plans. The IRS specifically focuses on verifying all minimum participation requirements, discrimination tests and vesting requirements. Just like the DOL, the IRS maintains the goal of making sure all the plan’s assets benefit participants of the retirement program.
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DOL JURISDICTION OVER PENSION ACCOUNTING PLANS
The Employee Benefit Security Administration (EBSA), a branch beneath the Department of Labor, has direct jurisdiction over pension audits plan. The DOL’s main concern is to ensure that the contributions of pension participants are deposited in a timely fashion into those employee accounts. The EBSA can request and review your pension plan documents at any time. These documents can include:
- Your plan document and related disclosures
- Form 5500 filings and annual reports summary
- Documents that detail plan sponsor or employer responsibilities related to plan payment costs
- Administrative services agreements and third-party agreements
- All other documents and records related to your plan operations
WHY YOU NEED A PENSION AUDIT
The pension audits and enforcement of both the DOL and the IRS ensure that the terms and conditions of your retirement, pension accounting and audit plans adhere to the highest legal and ethical standards. Whether you’re located in Manhattan, the surrounding New York City metropolitan area or beyond, consider the benefits of a pension accounting and audit.
The CPA-auditors at our office with office locations in NYC and Queens provide periodic or annual pension audits for your retirement and pension plans. Pension accountant can verify that your company is up-to-date on all the proper internal controls. They ensure that you’re adhering to the strict, ethical guidelines of the EBSA enforcement manual. Through a pension audit, you gain the peace of mind you need to stick to doing what you do best —working to increase your profits and your company’s success
TYPES OF OCCUPATIONAL PENSION PLANS
There are two forms of occupational pension audits plan:
- Defined Contribution Schemes — or Money Purchase Schemes
- Defined Benefit Schemes — also called Final Salary Schemes
The auditors and pension accountants in NYC at our firm ensure that the records of both types of pension accounts match the information from your payroll records and the scheme’s pension accountants and advisors. For Defined Contribution Schemes, the auditors verify accounting for pensions and that your company has paid the agreed upon contribution amounts within the set timeframe. For Defined Benefit Schemes, the pension auditors test and verify that your company is paying contribution amounts that were set by the actuary of the scheme.
PENSION ACCOUNTING AUDIT REQUIREMENTS AND CONSEQUENCES
If an EBSA pension audit uncovers an issue, the DOL and the IRS can get involved. These government agencies enforce one of several correctional programs geared to help get your plan back on track:
* Voluntary Fiduciary Correction Program
* Delinquent Filer Voluntary Correction Program
* Employee Plans Compliance Resolution System
Of course, it’s best if problems within your pension accounting or retirement plans are caught sooner. That’s one of the best reasons the expense of a pension audit by an independent pension accountant or auditor — one who has your interests in mind — makes financial sense. Self-examination of your accounting for pensions through a third-party pension audit provides protection from government correctional programs in the event of an IRS or DOL pension audit.
Additionally, retirement and pension audits plan — also referred to as occupational pension schemes — are required to provide financial statements to the plan’s participants every year. A pension audit is necessary to calculate these financial statements, and the conclusions become part of your company’s pension audit report. Call , pension accountant in NYC for a third-party pension audit.
GETTING A PENSION AUDIT
After you hire the NYC pension auditors at our company to do an accounting for pensions, your company has to open its doors and its books for the pension accounting and audit. Because a DOL audit verifies that your plan expenses are correct, that’s what your third-party auditors also have to ensure. You have to deliver:
* Draft pension scheme accounts, which typically include:
* The Statement of Net Assets, which is similar to a balance sheet
* A profit and loss statement or a fund account
* Pension plan reports from:
* Key managers
* Plan advisors
* Plan actuaries
* Investment and scheme administrators
* Access to employees and participants of the pension plan
Typically, our firm auditors do an accounting for pensions and spend two to three days on-site at the pension scheme or company offices. During the pension accounting and audit process, they cross-reference transaction samples with employee receipts and other related documents. The auditors have to verify that the accounts are properly and accurately prepared. They check pension accounting if contribution payments have been made in a timely manner and that the details conform to the schedule of contributions that the plan’s participants have agreed on.
THE PENSION AUDIT CONCLUSION
At the conclusion of your pension audit, the thorough auditors and pension accountants at our company typically prepare two reports:
- The first accounting for pensions report serves as an independent audit of the financial statements, verifying that the scheme’s accounts are an accurate view and that they meet all the accounting requirements.
- The second accounting for pensions report is a statement from the auditor that certifies all payments were made in accord with the pension’s schedule of contributions.
Your pension scheme’s trustees must sign the audit — as well as the financial statements — within seven months of the scheme’s year end. The signed accounting for pensions report and financial statements don’t have to be filed with any governing agencies, but they must be on-hand in case a regulator or a member of the pension asks for a copy of pension accounting.
The auditors also sign the reports — they are official documents — and include them in the trustees’ annual report. This pension accounting audit prepares your company for a pension audit by the EBSA or the IRS. To ensure that your company’s pension plan is bullet-proof, call our firm to request your pension audit.