Compensation arrangements take on many forms and are seldom limited to the fair wage paid to an employee.  There are the related taxes, withholdings, and other voluntary deductions for a variety of purposes such as health care, life insurance, and Section 125 "cafeteria plans".  All of these ancillary costs carry with them the burden of additional management and associated management costs that are necessary to business administration.  The most significant of these costs are those associated with employee benefit plans.  Not only are the plan contributions burdensome, the regulatory and additional tax filing requirements are also quite significant.

There are many questions to consider when deploying a retirement or employee benefit plan for your business and its employees.  Are you small enough to be exempt from audits?  Even if you are, you still must analyze annually whether you have complied with "top heavy" provisions, funding mandates, and other compliance requirements to maintain a qualified plan.

If you have implemented a 401(k), health insurance, pension plan, or a variety of other employee benefit plans and you are large enough to require audits, you will need to consider both the associated costs and increased management burden.  Should you use a third party administrator (TPA)?  If so, how does the selection of the chosen TPA affect plan administration, costs, and audits? 

Businesses needing separate audits of their employee benefit plans should be mindful of the fact that such audits are highly regulated by the Department of Labor and the selection of your auditor is critical.  The selection of a well trained professional firm with experience working with a variety of plan types, sizes, and TPAs is crucial to minimizing the risk of an inadequate audit that could result in steep penalties, loss of qualified plan status, and regulatory investigation.  As a commitment to quality, CLHP is a member of the AICPA's Employee Benefit Plan Audit Quality Center. Call us to discuss your employee benefit plan, our qualifications, and how we may be able to serve the tax and audit needs of your plan.