Proposed Statement on Auditing Standards | Employee Benefit Audit

Post by Larry Beebe

The Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AUCPA) has issued a proposed change to the auditing standards a CPA must follow in conducting an employee benefit audit.

The proposed changes include

Requiring certain additional procedures in an employee benefit audit “…irrespective of the risk of material misstatement.” Any findings of the CPA as a result of the additional procedures would have to be detailed in the auditor’s report. The auditor’s report, […]

New Ruling: Employer Must Make Contributions

Post by Larry Beebe

A 7th Circuit Court of Appeals upheld lower court decisions that an employer must continue to pay contributions to the health + welfare and pension funds, even though the funds sponsoring union was required to make contributions until the termination of the collective bargaining arrangement in 2015, even though the union was decertified in 2013. One judge said that the employers promise to make contributions until the expiration of the CBA was “Binding” and “Contractual.”

(Midwest Operating […]

Informative IFEBP Podcast Released

We recently listened to an informative and entertaining podcast, Talking Benefits Episode 3: It’s Complicated, released on March 8, 2017 by the International Foundation of Employee Benefit Plans (IFEBP). Their benefits experts provided updates on current regulatory matters, including Department of Labor nominations, the Fiduciary Rule status and the latest MPRA and PBGC petition outcomes. Most interesting is the discussion and summary of the new American Health Care Plan Act provisions. The presenters concisely describe what’s new and what’s […]

Segregation of Duties: The Key to Proper Controls and Minimizing Fraud

 

Post By Alyssa Sproat

Segregation of duties (SOD) is an essential part of the effectiveness of internal controls for any business. This integral separation ensures that key processes are performed by more than one person to prevent fraud or financial misstatement. While technology continues to become more sophisticated, the time is now to implement controls that segregate key functions within processes such as cash disbursements, investments, payroll, and many other areas.

The first step to implementing effective SOD is to truly understand […]

Is Your Plan Still Paying Benefits to Deceased Pensioners?

Post By Zack Podrasky

One of the most important aspects of pension payments is the timely ceasing of benefits when a participant dies. The state of Illinois found this out the hard way. Between 2010 and 2014, some of the largest pension funds in Illinois incorrectly paid approximately 400,000 deceased pensioners over $3.5 million in benefits. Although some funds were eventually recovered, Plans should have policies and procedures in place to avoid this difficult and costly situation. This is why […]

Kentucky Becomes Right-To-Work State

On January 9, 2017, Kentucky enacted law making it a right-to-work state, effective immediately.  The Kentucky law is prospective, applying to all new contracts and those renewed or extended after 1/9/17.  The law also includes a special provision that prohibits public sector employees from strikes or work stoppages and requires the public sector employees’ written consent in order to deduct dues or similar payments from their pay.
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Recap: 2016 IFEBP Annual Conference

By Larry Beebe

Last week I attended the International Foundation of Employee Benefit Plans (IFEBP) annual conference in Orlando. Each year the IFEBP annual conference provides education to trustees, administrators, and plan professionals who work closely with employee benefit plans.

The conference consists of fourteen 75 minute educational segments spread over a two and one half day period. At each time slot participants have a choice of approximately 20 different sessions they can attend.

These interesting sessions I attended were:

Cybersecurity | Understand, manage, […]

Fiduciaries Ordered to Pay Benefits Personally

Larry Beebe, CPA

A U.S. District Court in Oregon ruled that the trustees of a retirement plan must pay a participant’s retirement fund distribution from their own personal funds as a result of failing to prudently invest plan assets.

The plan had invested its assets in a single plat of undeveloped land owner by a real estate development company and in loans to that development company. The development company could not pay on any of its obligations. Because the trustees breached […]

DOL Investigating Plans that Fail to Locate Terminated Vested Participants

Larry Beebe, CPA

The Department of Labor (DOL) recently announced a new initiative to investigate the adequacy of Defined Benefit Plans procedures to locate and pay out benefits to terminated vested participants. DOL believed that many Plans do not have adequate systems to identify and pay terminated vested participants when they reach either the Plan’s normal retirement age or the IRS required minimum distribution age of 70 ½.

The failure to take action to identify, locate and pay terminated vested participants […]