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DOL Letter Blues

DOL Letter

Every year at around Christmas time (but not limited to only this time of the year), the Department of Labor (DOL) sends letters of notifications of rejected Form 5500s. Usually this relates to not filing the Form 5500 SF, but 5500 SFs are filed only by small Plans that have less than 100 eligible participants. For large plans (those with more than 100 eligible participants, generally speaking), the letter may point out that they have not included an Accountant’s Opinion. The exact wording of the DOL letter pointing out this deficiency states:

Our records indicate that you have not attached an Accountant’s Opinion, audited financial statements or accompanying footnotes. Your Plan contains assets, liabilities and/or income and does not meet any of the exceptions to the requirement of attaching a report of an Independent Public Accountant.

The actions that are acceptable by the DOL are to 1) File an acceptable, amended Form 5500 (with the accountant’s opinion); 2) Notify the Office of the Chief Accountant of the completed amended filing. The letter also notes that there are no provisions for extensions of time for correcting the filing and responding to the notice. The usual time frame to make either of these actions are 45 days from the date of the notice.

If an audit was not completed, and this is the reason why you received the letter, it is recommended that you immediately find an experienced auditor to assist in the quick turnaround of the audit for your plan. If the Form 5500 and the Accountant’s Opinion is not filed within the 45-day requirement, fees could be assessed to your Company. These fees can range up to thousands of dollars, so quick turnaround is a must to meet the required deadline.

Another important aspect, along with finding an experienced auditor that can start immediately, is to assist in gathering all the needed information for the plan audit when an auditor is attained. Responding immediately to all their requested items is pivotal in assuring the audit is completed timely. This will help speed the overall audit process and ensure your auditor has an adequate amount of time to understand the plan’s controls, specific risks, and to perform the audit in a quick, yet efficient manner.

And the companions, known as the 401k.9s

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