|
On Feb. 23, The DOL released changes to the 2023 Form 5500 and Form 5500-SF Annual Return/Reports for 401(k) and other groups of defined contribution retirement plans. Of note is the counting methodology for qualifying as a “small” plan, which is exempt from the independent qualified plan audit requirement.
For plan years prior to 2023 –
Independent Plan Audit required if the number of “participants” is generally 100 or more on the first day of the plan year. Importantly, “participants” is defined as all employees who are eligibleto participate in the plan (whether or not they choose to contribute or have an account balance) plus terminated employees with a balance remaining in the plan.
For plan years 2023 forward –
Independent Plan Audit continues to be required if the number of “participants” is generally 100 or more on the first day of the plan year. However, the participant-count methodology for defined contribution retirement plans will be based on the number of participants with account balances only (both active and terminated) and no longer include eligible employees who are without an account balance.
For many plans this will be a welcome change and relief that will result in lower cost and simplified plan administration.
Contact Everhart Advisors at 614-717-9705 or [email protected] with questions or assistance with the changes.
|