In the Orange County Business Journal, LSL CPAs shareholder Maria Arriola has published a well-received article on auditing pension plans. Featured in the Employment Resources & Solutions supplement, Maria Arriola highlights the importance of companies paying a closer look to the 80 – 120 participant rule when designing their pension plans.

As a specialist in Audit & Assurance, Maria Arriola has been providing the business clients of LSL CPAs with pension plan services for over twenty-five years. If you need help with or have questions about your company’s pension plan, please contact Maria Arriola at LSL CPAs today for a valuable consultation.

Below is the article from the Orange County Business Journal:

Does Your Pension Plan Need an Audit? A Closer Look at the 80 – 120 Rule

Generally speaking, pension plans with fewer than 100 participants at the
beginning of the plan year are considered small employee pension plans
and eligible for the Small Pension Plan Audit Waiver. However, the
Department of Labor (DOL) has identified the range of 80 – 120 participants
(at the beginning of the plan year) as a grey area where the company has
the option to continue as a small employee pension plan or elect large employee
pension plan status.

Please note all large plans are required to be audited annually.
The following chart illustrates the choices a company has when it falls into the 80 –
120 participant range:

The number of participants at the beginning of the current year is determined by the
number that was reported on Line 7 of Form 5500 in the prior year.

For a plan to be eligible for the Small Pension Plan Audit Waiver, the following
conditions must be met:

  1. At least 95% of the plan assets are “qualifying plan assets.” Qualifying plan
    assets are participant loans or shares issued by a registered investment
    company.
  2. The plan’s summary annual report must contain additional disclosures.
  3. If requested by a participant or beneficiary, the plan administrator makes
    available for examination, or upon request furnishes copies of, each
    regulated financial institution statement and evidence of any required bond.

There are more qualifying conditions, for a more detailed list call LSL CPAs &
Business Advisors at 714.569.1000.

Plans filing the Form 5500 as a large plan are generally required to have an annual
audit. This is true even if the plan has, for example, 81 participants but has elected to
file Form 5500 as a large plan under the 80 – 120 participant rule discussed above.

LSL CPAs has provided pension plan audit services to companies in Orange
County for over 15 years. For more information about getting your pension plan into
compliance call Maria Arriola, LSL CPAs Shareholder, at 714.569.1000.

See the original article from the Orange County Business Journal here.


Maria Arriola

For over 30 years, Maria has served clients in a variety of areas including financial statement audits, reviews and compilations as well as business and individual taxation.   Maria excels working with clients in the real estate, and healthcare industries, along with employee benefit plans. You can reach Maria at 714-569-1000 Read Maria's complete bio