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We provide audit services to insurance companies, retail
pharmacies, and pension & profit sharing plans. We
can provide you with cost effective, comprehensive
quality service. Our involvement includes the normal
audit function, as well as providing accounting systems
setup, installation, training and support and consulting
services as needed. We offer a wide range of services
including the evaluation and computational analysis of
employee benefit programs. In connection with expertise
that we do not provide, we would be able to refer a
capable contact.
Employee Benefit Plans
Employee benefit plans are very significant economic
entities in the United States today. There are
approximately 700,000 pension plans covering more than
90 million participants and beneficiaries. In addition,
there are approximately nine million health and welfare
benefit plans.
Employee benefit plans own
significant amounts of investments. Pension plans own
more than $4.3 trillion in assets. Plans that meet
numerous and complex tax qualification requirements do
not pay federal income taxes on the income their
investments generate; neither do the plan participants
pay taxes until they receive income in the form of
distributions from the plan. Participants in qualified
health and welfare benefit plans are not taxed on the
value of the benefits provided by the plan. In addition,
some types of employee benefit plans offer participants
tax exclusions for portions of their earnings they
contribute to the plan.
In the early 1970's, there was
great concern when participants in a large unfunded
pension plan lost their benefits due to the plan sponsor’s
bankruptcy. Also, it was not uncommon for employees who
worked many years to find that they could not receive
any of their accumulated plan benefits upon retirement
or termination because of their plans’ strict vesting
schedules. As a result, the Employee Retirement Income
Security Act of 1974 (ERISA) was passed to provide
minimum standards of vesting, funding, and fiduciary
behavior for pension and welfare benefit plans. ERISA
also established the Pension Benefit Guaranty
Corporation to insure benefits in case certain types of
pension plans were unable to meet benefit obligations.
In addition, ERISA established
record-keeping and financial-reporting responsibilities
for plans and imposed a requirement for plans with 100
or more participants to have an annual audit of their
financial statements. ERISA gave the Department of Labor
(DOL) and the Internal Revenue Service (IRS) authority
to issue regulations specifying requirements for the
financial records, tax return, annual report, and audit.
Those requirements include financial statement
requirements and audits in accordance with generally
accepted auditing standards (GAAS).
Employee benefit plans may be
broadly classified as either retirement plans or health
and welfare plans. Each of these two categories may
include either defined benefit or defined contribution
plans. For example, a retirement plan may be either a
defined benefit retirement plan (typically called a
pension plan) or a defined contribution plan. There are
several specific types of defined contribution plans,
such as profit-sharing plans, employee stock ownership
plans (ESOPs), and 401(k) plans. Health and welfare
plans may also be defined benefit or defined
contribution plans and may include specific types such
as medical, disability, or life insurance plans.
Client references available upon
request
Other
Audits
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