Question

A 401(k) profit-sharing plan must do which of the following? Issue quarterly statements showing the account balance to plan participants Have annual plan audits Provide summary annual reports to plan participants Be insured by the PBGC

Answer 1

Have annual plan audits

Generally, a plan must be audited when it has more than 100 eligible participants on the first day of the plan year—or 120 if the plan hasn’t been previously audited, and 100 every year after. Audits must be completed seven months after the end of the month the plan year ends, with an option to extend the deadline for two and a half months. If you have a calendar year-end plan, for example, on December 31, audits must be completed by July 31 of the following year, with an option to extend through October 15.