By Jenny Kiffmeyer, J.D – The Retirement Learning Center

Group of Plans Audit Requirement

ERISA consultants at the Retirement Learning Center (RLC) Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings and income plans, including nonqualified plans, stock options, and Social Security and Medicare.  We bring Case of the Week to you to highlight the most relevant topics affecting your business.

A recent call with a financial advisor from Minnesota dealt with a question on Group of Plans (GoPs). The advisor asked: “Did the DOL or IRS ever conclude whether a GoPs is subject to the annual Form 5500 audit requirement?”

Highlights of Discussion

This is a timely question as the SECURE Act of 2022, enacted as part of the Consolidated Appropriations Act, 2023, addresses this question specifically.  Section 345 of the law clarifies that plans filing as a GoPs will submit an auditor’s opinion if a plan, individually, has 100 participants or more. In other words, any audit required shall relate only to each individual plan that would otherwise be subject to an independent audit. The new rule took effect on December 29, 2022.

For more details on GoPs, please see a related case: Group of Plans or Defined Contribution Group Plans.

Conclusion

The SECURE Act created a consolidated Form 5500 filing option for GoPs beginning with the 2022 plan year. SECURE Act 2.0 of 2022 clarified the application of the independent auditor’s report as applying to individual plans within the GoPs.