SAS No. 136: New Auditing Standard for Employee Benefit Plans

In July 2019, the AICPA’s Audit Standards Board issued Statement on Auditing Standards (SAS) No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. The new standard will have a significant impact on the highly specialized area of ERISA plan audits.


For context, the Employee Retirement Income Security Act of 1974 (ERISA) generally requires employee benefit plans with 100 or more participants to have an independent financial statement audit as part of the plan sponsor’s obligation to file a Form 5500. The primary objective of the audit is to provide assurance that the plan’s financial statements are free from material misstatements.

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Proposed Changes to Employee Benefit Plan Annual Reporting

By Shawn Hansen, CPA

Under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (IRC), private-sector retirement and welfare plans are required to file annual returns/reports.

Filing a Form 5500, along with any required schedules and attachments, typically satisfies the annual reporting requirement. The Form 5500 is the primary source of information about a plan’s financial condition and operations. Federal agencies use this important tool to determine compliance and enforcement initiatives.

Last July, the Department of Labor (DOL), IRS, and the Pension Benefit Guaranty Corporation (PBGC) proposed changes to employee benefit plan annual reporting. These new regulations would update and expand Form 5500 reporting requirements.

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What are an Employer’s Fiduciary Responsibilities?

By Julie Eisenhauer, CPA

A lawsuit was recently settled for $62 million in which the employees accused the employer of mismanaging their 401(k) plan. The lawsuit stated that the employer hid excessive fees and invested in conservative investments that resulted in diminished investment returns for plan participants. In another case, the U.S. Supreme Court will soon hear arguments where participants in a 401(k) plan argued that they were being charged excessive fees.

These cases raise the question: what are the employer’s fiduciary responsibilities with respect to retirement plans they sponsor? The Employee Retirement Income Security Act (ERISA) sets standards of conduct for those who manage private-sector retirement plans and its assets (called fiduciaries).

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Retirement Plans and the Importance of Documentation

By Shelly Archuleta, CPA

Over the last decade, an increasing number of plan sponsors and third-party administrators (record-keepers) have moved to a paperless environment. Almost anything can be kept on a hard drive or in the cloud. Employee records and payroll data are often kept electronically without a hard copy being printed and stored in an employee file. Most plans now allow participants to make changes to their deferral and investment elections, or request loans or benefit payment online or over the phone with minimal oversight or review by the plan sponsor.

In an electronic world, plan sponsors may not realize the importance of keeping proper documentation to support information required to be reported under ERISA or to demonstrate appropriate oversight and monitoring of the plan.

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Who’s Monitoring Your Organization’s Retirement Plan?

By Shawn Hansen, CPA

Implementing a retirement plan can be one of the most rewarding decisions your organization can make. Not only do they help employers attract and retain talent but also provide a saving vehicle for its employees as they build for their future. Once a retirement plan is established, Federal law in the Employee Retirement Income Security Act of 1974 (ERISA) sets rules and guidelines that employers must follow (ERISA does not cover Federal, State and local government plans or plans sponsored by churches). Plan sponsors are required to name a person or group responsible for managing the plan. In addition,

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