| Dear Center Members: |
| This alert provides resources and tools on the timely remittance of employee contributions and loan repayments in defined contribution retirement plans, and information on DOL's best practices guidance on cybersecurity for EBPs. |
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Resources and tools – Timely remittance of employee contributions and loan repayments in defined contribution retirement plans
Late remittances of employee contributions to a defined contribution plan can raise important fiduciary and reporting issues for plan management. If employers do not remit employee contributions on time, the IRS requires businesses to take additional steps to correct and disclose this information. Late remittances may also be considered a prohibited transaction under DOL regulations. In addition, auditors must consider the potential for prohibited transactions—including late remittances—in their plan audits. This alert summarizes helpful resources to understand plan management's responsibilities for ensuring timely remittances, the auditor's responsibilities, consequences for failure to timely remit employee contributions and loan repayments, and other helpful resources.The Center has compiled tools and resources to assist members and their clients in analyzing the timely remittances of employee contributions and loan repayments in defined contribution retirement plans.
EBPAQC resources
EBPAQC primer, Timely remittance of employee contributions in defined contribution retirement plans
This primer addresses DOL rules for remittance of employee contributions and loan repayments, plan management's responsibilities for ensuring timely remittances, the auditor's responsibilities, consequences for failure to timely remit employee contributions and loan repayments, and other helpful resources.
Click here for the EBPAQC primer.
EBPAQC tool, Analyzing timeliness of remittances
This tool is intended to assist clients in documenting their analysis of the timeliness of remittances of participant (employee) contributions and loan repayments, if applicable, in defined contribution retirement plans. It also may be used to document a recap of employer contributions and includes an option to reconcile employer contributions to the trust statement to verify completeness of contributions.
Click here for the EBPAQC tool.
EBPAQC members are encouraged to share this tool with their plan clients.
IRS and DOL resources
IRS 401(k) Plan Fix-It Guide is a helpful resource for finding, fixing, and avoiding this mistake.
DOL's FAQs about Reporting Delinquent Participant Contributions on the Form 5500 provides information about reporting delinquent participant contributions on the Form 5500.
DOL releases guidance on best practices for maintaining EBP cybersecurity
The Department of Labor has released new guidance for plan sponsors, plan fiduciaries, record keepers and plan participants on best practices for maintaining cybersecurity.
- Tips for Hiring a Service Provider: Helps plan sponsors and fiduciaries prudently select a service provider with strong cybersecurity practices and monitor their activities, as ERISA requires.
- Cybersecurity Program Best Practices: Assists plan fiduciaries and record-keepers in their responsibilities to manage cybersecurity risks.
- Online Security Tips: Offers plan participants and beneficiaries who check their retirement accounts online basic rules to reduce the risk of fraud and loss.
The DOL guidance complements EBSA's regulations on electronic records and disclosures to plan participants and beneficiaries. These include provisions on ensuring that electronic recordkeeping systems have reasonable controls, adequate records management practices are in place, and that electronic disclosure systems include measures calculated to protect Personally Identifiable Information (PII).
Plan auditors may want to make their clients aware of the DOL guidance.
The EBPAQC Cybersecurity and employee benefit plans: Questions and answers provides plan auditors with and understanding of cybersecurity risk in employee benefit plans, and to discuss cybersecurity risk, responsibilities, preparedness, and response with plan clients.
Click here for the EBPAQC Cybersecurity and employee benefit plans: Questions and answers.
Sincerely,
AICPA Employee Benefit Plans Audit Quality Center |
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