Summary
This guide outlines common mistakes that can occur during a 401(k) plan audit and provides recommendations for preventing these issues. It emphasizes the importance of regular reviews throughout the year to identify and address potential gaps in payroll processes, employee data, plan administration, and internal controls. Key areas of focus include the timely remittance of employee contributions, accurate census data, and proper compensation definitions. The document details how errors in these areas can lead to compliance issues, affecting eligibility and vesting. It also highlights the risks associated with manual spreadsheets and the need for careful tracking of employee service and vesting rules. The guide concludes by encouraging employers to take a proactive approach to compliance and documentation, thereby reducing the likelihood of audit surprises and supporting effective retirement benefit management.
