403(b) Plans
Also known as tax-sheltered annuity (TSA) plans, 403(b) plans are retirement plans for certain employees of public schools, hospitals, charities and other tax-exempt organizations. Individual 403(b) accounts are established and maintained by eligible employees. Freed Maxick performs 403(b) plan audits in Buffalo, Rochester, Syracuse, Albany, Western New York (NY) and Erie, PA.
Major Shift in 403(b) Audit and Reporting Requirements — Are You Prepared?
Are you a non-profit organization offering 403(b) pension plans to your employees? If so, the Department of Labor has issued new audit requirements for 403(b) plans.
Effective beginning with year 2009 plans, 403(b) plans are now subject to the same IRS Form 5500 reporting and audit requirements as 401(k) plans. This marks a shift from past years, in which 403(b) plans were exempt from Form 5500 reporting and audit requirements. Keep in mind, the new requirements governing 403(b) plans are not universally applicable, and exceptions exist.How can you determine if you are affected? And, if you are, what are the next steps?
Why is a 403(b) Audit Important?
ERISA-covered 403(b) plans with 100 or more participants generally will be required to file audited financial statements beginning with their 2009 Form 5500 filing. 403(b) plans with fewer than 100 participants may be eligible to use abbreviated reporting forms without audited financial statements. Meeting requirements is an important step in maintaining a quality employee benefit plan and choosing a qualified auditor is crucial to meeting reporting requirements and reaching business goals. Substantial penalties, fees and account adjustments could be required if the IRS discovers problems during a plan audit. Employers could be required to make up contributions they failed to make, and employees could be taxed on contributions they thought were tax-sheltered. Sometimes penalties can be negotiated with the IRS before a closing agreement ending the audit is finalized.
Helpful Links, Tools and Resources
403(b) Plan Audit Frequently Asked Questions
The AICPA 403(b) Task Force has developed FAQs to assist plan auditors and plan administrators comply with the new reporting requirements (and subsequent DOL enforcement relief in Field Assistance Bulletins) for section ERISA-covered 403(b) retirement plans.
403(b) Filing and Audit Requirements
The AICPA Employee Benefit Plan Audit Quality Center has developed this summary of 403(b) retirement plan filing and audit requirements.
403(b) Getting Started: Meeting the New Form 5500 Reporting and Audit Requirements
The AICPA Employee Benefit Plan Audit Quality Center has suggested steps plan sponsors and administrators can take now to help their plan meet the new filing and audit requirements.
403(b) Questions to Expect from Your Plan Auditor
The AICPA Employee Benefit Plan Audit Quality Center has developed this tool to provide examples of the types of questions that plan management may be asked by the plan's independent auditor.
403(b) Sample Auditor Request List for Plan Information
The AICPA Employee Benefit Plan Audit Quality Center has developed this tool to provide examples of the types of documents, schedules and information that plan management may be asked to provide or make available to the plan's independent auditor.
Choosing the right team
This highly specialized area of employee benefit plan audits requires an experienced team of professionals. Freed Maxick & Battaglia has the knowledge base and training to conduct audits for 403(b) plans under the regulations outlined in Employee Retirement Income Security Act (ERISA) and the Internal Revenue Service (IRS). Plan sponsors should determine if they are subject to the new requirements, and take appropriate steps to satisfy their reporting obligations
Engaging Freed Maxick & Battaglia for your employee benefit plan audit means a reliable audit provider that will help make complex ERISA auditing and filing processes efficient and cost effective. Your 403(b) plans will have undergone a complete and accurate audit in compliance with all ERISA and IRS regulations. Freed Maxick dedicates substantial resources to ensure that we are committed to providing quality employee benefit plan audits to our clients. Listed below are the key factors that demonstrate our qualifications and willingness to provide your Plan and management excellent service in a timely, professional, and personalized manner.
- We currently perform approximately 100 employee benefit plan audits each year, and have a core group of 20 people who have been trained in the numerous rules and regulations impacting this highly specialized industry. Our annual audits consist of Defined Contribution Plans, Defined Benefit Plans, 403(b) plans, Employee Stock Ownership Plans and VEBA Plans.
- We are a member of the American Institute of Certified Public Accountants Employee Benefit Plan Audit Quality Center. This program was established to help its members achieve the highest standards in performing quality employee benefit plan audits. Membership requires that Firms maintain a consistent level of quality with respect to audits of employee benefits plans and staff continuing education requirements.
- Our firm is a member of the Center for Public Audit Firms of the AICPA. Additionally, we are registered, and in good standing with the Public Company Accounting Oversight Board (PCAOB). We go through a rigorous peer review every three years to ensure the quality of our work is in accordance with our professional standards. Our most recent peer review was an unqualified opinion with no letter of comments, a rating that less than 15% of all firms obtain.
- While Freed Maxick & Battaglia, CPAs, PC is a locally owned Firm, we have access to the resources of a national firm, RSM McGladrey, Inc., if those resources become necessary. RSM McGladrey is the 5th largest accounting firm in the country and audits over 100 SEC registered companies.
- We conduct a number of seminars and training sessions each year for the benefit of our staff and clients. We invite our clients to participate and encourage them to communicate their topics of interest. We also have an expansive library of articles and other resources that we make available through our website.
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Contact Our Employee Benefit Plan Group: Send Requests for Proposal to:
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Freed Maxick & Battaglia, CPAs
Attn: Eric Majchrzak
424 Main Street
Liberty Building, Suite 800
Buffalo, NY 14202
or send via email here
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Freed Maxick & Battaglia, CPAs is Western and Upstate New York's (NY) largest public accounting firm and a Top 100 firm in the U.S. Freed Maxick provides Employee Benefit Plan Audit services to private and public (SEC) companies in New York State, including Buffalo, Rochester, Syracuse and Albany areas. Affiliated with RSM McGladrey, the 5th largest accounting firm in the U.S., Freed Maxick has vast national and international resources to help your business expand nationally and internationally.
Contact us Via the Web or
Toll Free: 1-800-777-4885
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