You are quite correct when you say mandating standard audits in place of limited-scope audits of certain retirement plans will add to plan sponsor costs (“Time to expand audits,” Editorial, Jan. 7). You are quite wrong when you say these are “necessary” costs.
These costs will add substantially to the burden already faced by plan sponsors while offering nothing in return. That's because limited-scope audits apply to information certified by insurance companies, which are highly regulated and already subject to annual audits.
The current limited-scope audit rule recognizes that forcing plan sponsors to pay for audits of information that has already been audited is a needless expense, one that will provide no new information or add a single protection for beneficiaries. Indeed, we are not aware of any participants being harmed by plans having a limited-scope audit.
Heaping unnecessary costs on employers that sponsor retirement plans is a serious mistake.
Vice president, taxes & retirement
security, American Council of
This article originally appeared in the February 18, 2013 print issue as, "Full audits of plans add substantial costs".