Do You Have More Than 100 Employees in Your Employee Benefit Plan?

If you have more than 100 employees participating in your employee benefit plan (EBP), you may be required to undergo an EBP audit. For plan years beginning on or after January 1, 2023, the requirements for an EBP audit have changed. Defined contribution plans that have at least 100 participants with account balances in their EBP account will be subject to an audit. The audited financial statements are required to be filed with the filing of Form 5500. The first due date for filing is the last day of the seventh month after the plan’s year end. For most plans, this will be July 31. If you feel like you need more time, an extension can be filed for an additional two and a half months, which in most cases, is October 15.

If this applies to your plan, what can you expect next? The purpose of an EBP audit is to ensure that the plan is operating in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”) and the plan provisions selected by the plan sponsor. Employee benefits, including bonuses, can have significant tax implications. To understand how bonuses might affect your company's tax reporting, and deductions, check out our blog on Tax Implications of Bonuses. If you haven’t had an EBP audit in the past, you should first find an independent auditor with experience in EBP audits to perform the service. R&A's two assurance partners have a combined more than 30 years of experience in EBP audits. If you believe your employee benefit plan requires an audit, or you would like to inquire about our services, please reach out to our team. We can assist you in making sure your plan is in compliance with the Department of Labor, ERISA, and your plan documents.