One important process a plan sponsor/administrator can adopt and implement is a formal review procedure to identify any mistakes in administering an employee benefit plan. The periodic review of the items and operations would enable a plan to be corrected in a timely manner. Learn how your plan can leverage effective internal controls to ensure any issues or compliance concerns are addressed in a timely manner - O'Connor Davies - NY CPA Firm - 401k Plan Auditor

1. Employee Benefit Plan Newsletter
Reducing the Risks of Plan Errors – Utilizing
Internal Controls
Louis F. LiBrandi, Principal
This newsletter is intended to assist plan sponsors and plan administrators reduce the risk
associated with maintaining employee benefit plans. Every plan sponsor is aware of the
various “form” and operational aspects of maintaining an employee benefit plan to meet the
many compliance and complex government regulations.
One important process a plan sponsor/administrator can adopt and implement is a formal
review procedure to identify any mistakes in administering an employee benefit plan. The
periodic review of the items and operations would enable a plan to be corrected in a timely
manner.
Louis F. LiBrandi
Principal
llibrandi@odpkf.com
212.286.2600
Internal controls are business processes designed to detect and prevent mistakes in the
operation and the updating of the plan’s provisions (required by law changes or changes
made in plan operations).
The establishment of this procedure has been encouraged by the Internal Revenue Service
(“IRS”) and Department of Labor (“DOL”). Both the IRS and DOL have robust examination and
investigation programs, respectively, included in their priority work plans for employee
benefit plans. The written processes and procedures maintained by an employer are being
requested during the reviews by the government agencies, and when produced they can
reduce the scope of the government’s audit. The creation of this documentation also assists
plan administrators to perform self-correction to ensure their plans are operating in
accordance with the plan documents.
Timothy Desmond
Partner
tdesmond@odpkf.com
914.381.8900
A listing of the primary plan document and operational processes provided below pertains to
retirement plans [i.e., 401(k), 403(b), profit sharing and defined benefit, etc.], and welfare
benefit plans [i.e., Health Reimbursement Accounts (“HRAs”), cafeteria plans with flexible
spending accounts, etc.].
Areas to be reviewed:
Review plan documents and amendments to ensure they were timely adopted and
satisfy the currect statutory requirements.
Determine if all eligible employees are timely included in the plan.
Verify the appropriate amount of employer contribution allocated to the participant
after considering if all the requirements to receive a contribution were satisfied.

2. Contact:
New York, NY
212.286.2600
212.867.8000
Harrison, NY
914.381.8900
Stamford, CT
203.323.2400
Paramus, NJ
201.712.9800
Cranford, NJ
908.272.6200
New Windsor, NY
845.220.2400
Wethersfield, CT
860.257.1870
Review if the appropriate compensation was used to determine the employer
allocation to the participant.
Become familiar with the nondiscrimination testing requirements for the plan and
review the results and any required follow up activities.
Reconcile amounts on the Form 5500 to the plan’s financial statements and/or trust
reports.
Verify the process for crediting years of service for eligibility and vesting purposes.
Test check distributions (i.e., loans, hardships, disability payments, etc.) made from
the plan to determine if the plan’s rules were followed, and if the reporting of these
distributions were accurate.
Ensure any fidelity bond and fiduciary insurance is still in-force.
Establish a process to review and discuss with an expert the process of updating the
employee benefit plans.
If you would like more information or have any questions, please contact Louis F. LiBrandi at
(212) 286-2600; llibrandi@odpkf.com; or Timothy Desmond at (914) 381-8900;
tdesmond@odpkf.com.
About O’Connor Davies
O'Connor Davies, LLP is a full service Certified Public Accounting and consulting firm that has a long
history of serving clients both domestically and internationally and providing specialized professional
services of the highest quality. With roots tracing to 1891, seven offices located in New York, New
Jersey and Connecticut, and approximately 500 professionals including 82 partners, the Firm provides a
complete range of accounting, auditing, tax and management advisory services. O’Connor Davies is
ranked as number 36 in Accounting Today's 2013 "Top 100 Firms" in the United States. The Firm is also
within the 20 largest accounting firms in the New York Metropolitan area according to Crain's New York
Business and the Westchester and Fairfield County Business Journals.
O’Connor Davies, LLP is a member firm of the PKF International Limited network of legally independent
firms and does not accept any responsibility or liability for the actions or inactions on the part of any
other individual member firm or firms.
IRS CIRCULAR 230 DISCLOSURE: To comply with IRS regulations, we are required to inform you that
unless expressly stated otherwise, any discussion of U.S. federal tax issues in this correspondence
(including any attachments) is not intended or written to be used, and cannot be used, (i) to avoid any
penalties imposed under the Internal Revenue Code, or (ii) to promote, market, or recommend to
another party any transaction or matter addressed herein.