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DOL Enforcement Activities Expected to Grow for Audit Issues

The vast majority of retirement plans do not have to be audited, leading some to argue that the 100-eligible-employee threshold, which has been in place for a while, should be increased. Regardless, retirement plan sponsors with 100+ eligible employees — not 100 participating employees, which is the threshold for health and welfare plans — should be especially careful, with increased DOL enforcement activity likely.

Suggestions from an experienced auditor include:

• Don’t have the audit conducted when key employees are unavailable or expect to be busy with some other project.
• No matter how small the issue, it can still trigger DOL enforcement action.

The DOL is becoming less tolerant about audits that are not filed on time with the Form 5500. As new HR and benefits staff at a client company come and go, the advisor may be the one constant to make sure audits are done properly and on time. While saving plan sponsors from being the target of DOL enforcement activities and fines may go unnoticed, failing to do so will certainly won't.

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