What is an ERPA? For a retirement plan sponsor, an ERPA can help you avoid huge IRS fines and penalties if your 401(k) or other type of retirement plan is audited! Find out why!

1. 5 Reasons to Hire an ERPA – By Nora Bethman, CEBS, QKA, ERPA 8-14-13
ERPA is an acronym for Enrolled Retirement Plan Agent. It is a designation given by the Internal Revenue
Service (IRS) to those individuals who have demonstrated extensive knowledge of the Internal Revenue Code
Sections, regulations, and laws pertaining to retirement plans. But being an ERPA is more than memorizing
the Internal Revenue Code. The IRS designation allows ERPAs to represent clients before the IRS with respect
to audits, inquiries, tax levies, or voluntary compliance filingsconnected with retirement plans.
The top 5 reasons to work with an ERPA for your 401(k) or other retirement plan include:
1. Testing.ERPAs have to pass detailed tests in order to show complete knowledge and understanding of IRS
regulations, concepts and procedures affecting retirement plans, so you can be sure they understand the
complexities of your retirement plan.
2. Experience. By taking the time and making the effort to obtain the ERPA designation, this shows a
dedication and commitment to the field of retirement plan consulting and administration. An ERPA is not
just dabbling in retirement plans until something better comes along, nor is s/he a trainee first learning about
retirement plans at your expense.
3. Continuing Education.Because of the stringent continuing education requirements (24 hours per year,) if
there is a new law affecting your retirement plan, you can be sure an ERPA will be the first one to know about
it and be able to explain it to you.
4. Ethics.ERPAs are required by Circular 230, issued by the Treasury Department, to adhere to and apply in
practice the highest ethical standards of conduct. Violators can be subject to public censure, loss of ability to
practice, and monetary sanctions. That is a pretty strong reason that you can be assured that an ERPA will
make every effort to be correct, fair and honest in dealings with you and your plan. Other practitioners are
under no obligation to abide by any such standards of conduct.
5. IRS Audits. In the event your retirement plan is selected for audit by the IRS, an ERPA can represent your
interests and discuss all aspects of your plan with the IRS. This can be an invaluable benefit, because many
other third party administrators do not have the qualifications necessary to fully represent your plan in case
of audit. That leaves you in the precarious position of having to hire yet another outside person to not only
review and interpret what your third party administrator has done, but relay the information to the IRS in an
audit situation. It is so much easier for someone to explain their own work than to try to explain someone
else’s. Not to mention the additional time and cost involved in hiring another service provider to essentially
“pre-audit” your plan prior to an audit. And since IRS auditors know what the ERPA designation represents
and what to expect, your plan audit may proceed more smoothly right from the start.
Hiring and working with an ERPA to prepare plan documents, 5500 forms, non-discrimination testing, and
contribution calculations, conduct audits, and provide other plan consulting servicesfor your qualified
retirement plan is a great value because you are assured of an experienced, knowledgeable professional with
high standards of conduct working in your best interest to keep your retirement plan qualified.