Defined benefit pension plans require annual independent audits under ERISA when the plan has 100 or more participants. Summit Advisory provides technically rigorous, GAAS-compliant pension plan audits — protecting your employees, your organization, and your Form 5500 filing obligations.
Get a Free ConsultationWhat Is a Defined Benefit Plan Audit?
A defined benefit (DB) plan — also called a pension plan — promises participants a specific monthly benefit at retirement, typically based on years of service and compensation history. Unlike 401(k) plans, the investment risk falls on the employer, making accurate financial reporting and independent auditing especially critical.
ERISA requires plan sponsors to have their defined benefit plans independently audited each year by a licensed CPA when the plan covers 100 or more participants. The audit report must be filed with Form 5500 with the Department of Labor and must examine plan assets, benefit obligations, and administrative compliance.
Defined benefit plan audits are more complex than 401(k) audits due to the involvement of actuarial valuations, benefit payment accuracy, PBGC reporting, and the interaction between plan assets and projected benefit obligations (PBO).
Schedule Your Pension Plan AuditVerifying that benefit payments match plan terms, participant records, and actuarial calculations.
Coordinating with plan actuaries on the projected benefit obligation and funding status disclosures.
Testing investment balances, fair value classifications, and reconciliation to trust statements.
Verifying required minimum contributions were made in accordance with ERISA funding rules.
Confirming required Pension Benefit Guaranty Corporation (PBGC) premiums were calculated and paid correctly.
Our Services
Summit Advisory provides complete defined benefit pension plan audits under ERISA, GAAS, and applicable DOL requirements — coordinating with your plan actuary, TPA, and trustee for efficient engagement delivery.
Complete GAAS audit of plan financial statements including plan assets, benefit obligations, contributions, and benefit payments — with an independent auditor's report for Form 5500 attachment.
Detailed testing of benefit payment calculations for a statistical sample of retirees and beneficiaries — confirming amounts are accurate under plan documents and actuarial assumptions.
We review actuarial reports, coordinate with your plan's actuary on disclosures, and evaluate the reasonableness of key assumptions including discount rates, mortality tables, and salary scales.
Verification of investment balances, reconciliation to trustee statements, fair value level classification under ASC 820, and testing of investment income and return calculations.
Assessment of minimum required contributions under IRC Section 430, verification of actual contributions made, and review of funding notices provided to participants.
We coordinate with your TPA and actuary to ensure the Form 5500, Schedule SB (actuarial information), and our audit report are consistent and filed by your deadline.
Our Process
We gather plan documents, prior filings, trust statements, and actuarial reports — coordinating with your actuary and TPA to define scope and timeline.
We test investment balances, verify reconciliations to trust statements, and review actuarial reports for reasonableness of benefit obligation calculations.
We test benefit payment calculations, verify participant eligibility, and assess compliance with plan terms and ERISA benefit accrual requirements.
We issue the audit report and work with your plan administrator to ensure Form 5500 and Schedule SB are complete, consistent, and filed on time.
FAQ
Defined benefit audits are more complex due to actuarial involvement, benefit payment accuracy testing, PBGC compliance, and the interaction between plan assets and projected benefit obligations. They require deeper coordination with actuaries and trustees.
The Pension Benefit Guaranty Corporation (PBGC) insures defined benefit pension benefits. Plan sponsors must pay annual PBGC premiums. Our audit verifies that required premiums were accurately calculated and timely paid.
Yes. We review and rely on actuarial reports for benefit obligation disclosures. We coordinate directly with your plan's enrolled actuary to obtain the information needed for audit procedures and financial statement disclosures.
Underfunded plans face minimum funding requirements under IRC Section 430 and may have reporting obligations to participants and the PBGC. Our audit identifies funding status and reviews compliance with applicable funding requirements and disclosures.