Your employer-sponsor retirement plan can probably tell the tale of this topsy turvy year: staffing changes, a shift to remote work, and, potentially, distribution and loan provisions allowed by the CARES Act. How should you gear up for financial audits performed with Form 5500s?
How Did Your Processes Change?
Some plan sponsors might not have experienced many changes, but, those who did adopt the coronavirus-related distribution (CRD) and loan provisions of the CARES Act, will need to be prepared for auditors to look at more types of distributions. Similarly, shifts to remote work will prompt new auditor inquiries.
Beth Garner, national practice leader for BDO’s employee benefit plan audits practices, recently shared advice with Plan Sponsor. Key points include:
Auditors are always supposed to look for fraud… but the pandemic might have created a situation where plan accounts are more susceptible to fraud with working remotely, children at home and other distractions.
“One thing auditors will ask is, ‘In 2019, your process was this. Did that process change?’ Auditors will want to know what the new process is and how plan sponsors know that a person can’t do something to divert contributions or take something they shouldn’t be taking. They will look for oversight of distribution or loan approval.”
While they’re working remotely, plan sponsors must be more diligent about knowing who their named and functional fiduciaries are and tightening up roles. They also should make sure computer system firewalls are good and employees do not use public WiFi. Also, plan sponsors should look at plan transaction reporting monthly, or at least more often than quarterly or yearly.
Protecting Your Plan—and Yourself
Remember, businesses of all sizes—not just the big ones—are targets for cyber breaches. Although they don’t generally make the headlines, small businesses have become especially lucrative targets. Remote operations have added to the vulnerabilities. Auditors will want to know: what is your plan in the event of a data breach?
Why go it alone? Armed with Colonial’s affordable Cyber Liability protection, you’ll be prepared. Expert forensic and legal experts will identify what’s been comprised and coordinate the response. As needed, call center support, credit and identity monitoring services and even public relations expertise are provided. Liability protection in the event of covered lawsuits or regulatory actions due to a data breach? Of course that’s included too.
Available with a complete ERISA Bond Package, Colonial’s Cyber Liability coverage protects your business and retirement plan in the event of a cyber breach. Importantly, Colonial’s packages also include Fiduciary Liability protection. Why not have this protection for your hard-earned assets, when even the allegations of a fiduciary breach will divert attention and resources from your work, life—and retirement dreams?
Colonial’s comprehensive and affordable packages were specially designed for plan sponsors. Included are: the required ERISA bond protects the assets of the retirement plan from theft; Fiduciary Liability coverage to protect you and your assets from personal liability; and, Cyber Liability coverage to safeguard your company and plan from covered losses and expenses in the event of a cyber breach.
With Colonial, you can easily and affordably secure this complete coverage package.
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