Reviewing employee retirement plans
It is a mandatory requirement that all companies covered under the Employee Retirement Income Security Act (ERISA) perform a yearly audit on their retirement plans for employees. The results of these audits are subject to review by both the Department of Labor (DOL) and the American Institute of Certified Public Accounts (AICPA), the largest member association representing accounting professionals.
Reviewing employee retirement plans on a regular basis will ensure that your company meets or exceeds the standards established by both organizations. The goal is to structure a plan that accomplishes what is best for your employees, without sacrificing what is best for your company. When analyzing the average achievement of the plan, there are a number of criteria an auditor would use to benchmark its performance.
Though there is no defined standard, comparing the performance of your plan relative to that of similar plans within your peer group can provide a touchstone. Analyzing participation rates, including matching contributions, and the breadth of fund options available to your employees, are two other ways of measuring your plan’s performance relative to the industry as a whole.
Stay on track
Another useful piece of data to look at is the average account size of participants. It gives you a broad idea of whether your employees are accumulating sufficient funds and determines the annual rates. The larger the account balances, the lower the per-person fees incurred by the plan’s participants.
Ultimately, the goal of analyzing the size and growth of participants’ account balances is to estimate whether they’re on track to receive enough cash flow upon retirement to sufficiently replace pre-retirement income. Auditing retirement plans for employees is a highly specific focus of any bookkeeping and accounting firm. GYL in Southern California has dedicated staff that specialize in this area of finance.
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Get assistance where needed
In addition to reviewing retirement plans annually, we can assist you in making changes and updating policies in place currently to maximize the performance of your plan. We also offer accounting services for businesses, along with consulting in areas such as revising your business plan to spur future growth.
Call to schedule a free consultation regarding how we can help your company structure and audit your employee benefits plan to ensure it meets or exceeds the ERISA standards.