Gifts & Estate Tax
Benefit Plan & 401(k) Audit
In order to determine the audit and filing requirements for qualified retirement plans, it is necessary to be aware of what has become known as the 80-120 Participant Rule. Generally, Federal law requires employee benefit plans with 100 or more participants to have an audit as part of their obligation to file an annual return and report (Form 5500 series) while plans covering fewer than 100 participants at the beginning of a plan year are called “small plans” and do not require an audit.
The 80-120 Participant Rule is an exception to the general rule and allows the plan administrator to elect to complete the annual return/report in the same category (“large plan” or “small plan”) as was filed for the prior year return/report. Therefore, until the retirement plan’s participant count at the beginning of a plan year goes above 120, the plan can continue to file as a “small plan” and would not require an audit. Once the retirement plan’s participant count at the beginning of a plan year exceeds 120, the plan will be classified as a “large plan” and would require an audit for that year, as well as for each subsequent year until the beginning of the year participant count decreases to 99.
PNJK is providing a quality benefit plan audit, which will help protect the assets and the financial integrity of your employee benefit plan and ensure that the necessary funds will be available to pay retirement, health, and other promised benefits to your employees. A quality audit also will help you carry out your legal responsibility to file a complete and accurate annual return/report for your plan each year. We audit many companies, ranging from 100 participants to several thousand, and provide limited and full-scope audit services across a wide range of plan types.
Our professionals are available to assist plan administrators and plan sponsors regarding a wide range of plan types, including:
Attest, compliance and consulting services offered by our group include: