Selecting an Auditor for Your Retirement Plan

Understanding the Need for an Audit

If your company’s 401(k) plan has 100 or more participants, you'll likely need to submit audited financial statements with the annual Form 5500 report. The task of choosing the right auditor is not just about compliance but also a key aspect of safeguarding the financial health of the plan.

The Importance of a Quality Audit

A thorough audit provides the plan administrator with insights that ensure funds are available to meet future benefits. It also helps employers fulfill their legal responsibility to file a comprehensive and precise Form 5500. Hiring an auditor is thus a crucial fiduciary duty that goes well beyond price comparisons.

Guidelines for Choosing an Auditor

When selecting an auditor for your retirement plan, consider the following:

Evaluating Prospective Auditors

Don’t just accept the lowest bid. Consider the auditor’s experience, the quality of their prior work, and references from other 401(k) plans. Additionally, you can confirm the validity of their license with the appropriate state authority.

A careful selection process ensures that your retirement plan remains solid and compliant, ultimately benefiting both your employees and your organization.