Important Reminder: Changes to Employee Benefit Plan Audit Requirements

Important Reminder: Changes to Employee Benefit Plan Audit Requirements

Dear gish Community,

The U.S. Department of Labor (DOL), IRS, and the Pension Benefit Guaranty Corporation issued changes to employee benefit plans and Form 5500 filings, effective for plan years beginning on or after January 1, 2023. These changes impacted the way defined contribution plans determine if they are required to undergo an audit by an independent qualified public accountant.

Key Changes:

Participant Count Methodology:

• The 100-participant threshold for requiring an audit is based on participants with account balances at the beginning of the plan year, rather than total eligible participants.

Impact on Audit Requirements:

• Some plans that previously required an audit may no longer need one under these rules.

• These adjustments were aimed at reducing costs and administrative burdens for smaller plans while ensuring regulatory compliance.

Exceptions:

• For newly established plans, the determination of “large” vs. “small” plan status is based on participants with account balances at year-end.

• The 80-120 Participant Rule remains unchanged, allowing plans within this range to elect to file as they did in the previous year.

What This Means for You:

• Plan sponsors should evaluate their participant counts with account balances to determine if an audit is required.

• Begin preparing now by consulting with your auditors and third-party administrators.

If you have any questions, please contact a gishSEIDEN representative.