Terms Flashcards
General Flashcards
Establishes reporting standards for
Defined Benefit plans
FASB ASC Topic 960
A voluntary membership org. for firms that perform benefit plan audits
Employee Benefit Plan
Audit Quality Center (EBPAQC)
Establishes reporting standards for Defined Contribution plans
FASB ASC Topic 962
Maximum penalty for deficient/missing information on the required audit report
$50,000 per annual 5500 filing
Establishes reporting standards for health & welfare benefit plans
FASB ASC Topic 965
Written communication intended for plan management
Management Comments Letter
A type of plan weakness reported to management
Internal plan processes
Illegal use of property or funds of an individual for another’s own use
Misappropriation
When financial statements are compromised
Financial Statement Fraud
Studies by this org. identified the most common methods for detecting fraud
Association of Certified Fraud Examiners (ACFE)
Departments where fraud is most likely to occur
Accounting, Operations, & Upper
Management
Results of the 2014 DOL Audit Quality Study
4 out of 10 audits had Unacceptable–Major deficiencies
Part of the DOL, oversees the quality of benefit plan audits by CPAs
Employee Benefits Security
Administration (EBSA)
Document to a client from an independent qualified public accountant
Engagement Letter issued at the
beginning of a plan audit
Deficiency in an internal control that is less severe than a material weakness
Significant weakness
Entity responsible for understanding
the objective of the plan audit
Plan Management
Entity that does not have the right to examine an auditor’s work papers
Plan Administrator
The most effective fraud detection tool available
Whistleblower Hotline
Entity responsible for expressing an opinion on a plan’s financial statements
Plan Auditor
Departments where fraud occurrences are low
Human Resources, Boards of
Directors, & Legal
Default options for DC plans prior to PPA Act of 2006
Money Market Funds
Most popular default DC investments post-PPA
TDFs
One basis point
Equal to 1/100th of 1% or 0.01%
Court case on fiduciary risks of not paying attention to investment fees
Tibble vs. Edison
What is the time limit for filing a lawsuit for breach of fiduciary duty?
No more than six years after
the date of the last action
Passing of this law is when DC plans
shifted from money market to TDF funds as a default
Pension Protection Act (PPA) of 2006
Part of a 401(k) plan or pension plan, pooled into investment vehicles, and follow an investment strategy.
Collective Investment Trusts (CITs)
Measurements of value of mutual funds in accounts owned by an insurance co.
Accumulation Unit Value
How long is plan info kept under ERISA Sec. 107?
A minimum of 6 years after the filing date of Form 5500
How long does ERISA Sec. 209 require records to be maintained?
Possibly Decades
Under what requirement can physical documents be converted to
electronic?
If transferred documents are legible, accurate, & reproducible
Ultimately responsible for ensuring that all plan transactions are executed in a timely fashion
Plan Sponsor
Core services provided by TPAs
Plan documents, compliance
testing, filing form 5500 etc.
Value per share of a mutual fund or ETF on a specific date/time.
Net Asset Value (NAV)
Entity responsible for year-end
compliance testing
TPA
Funds that seek higher returns by taking greater risk when workers are younger. As the worker gets older, the risky
proportion decreases
to mitigate potential
loss.
Target Date Funds (TDFs)
Entity responsible for maintaining
required plan records
Plan Administrator
Party that is obligated to assess and negotiate plan fees
Fiduciary
How often committees should evaluate the plan’s TFDs
Quarterly
Entity responsible for creation and maintenance of IPS policy statement
Fiduciary
