• A new executive order may allow 401(k) plans to invest in private equity, hedge funds, and other alternatives typically reserved for institutions.

• Plan sponsors must weigh higher returns against risks like illiquidity, valuation challenges, and increased fiduciary oversight responsibilities.

• Legal and regulatory frameworks are evolving fast, requiring plan providers to strengthen transparency, fee structures, and participant education.

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On August 7, 2025, President Trump signed an executive order directing the Department of Labor (DOL) and Securities and Exchange Commission (SEC) to expand access to alternative assets — including private equity, real estate, and digital assets — for 401(k) plans. The goal: open the door to private equity, hedge funds, real estate, and even crypto in retirement plan menus. As both 401(k) auditors and trusted advisors, MGO is helping plan sponsors understand what this expanded access to private equity means for governance and compliance.

Why This Matters Now

With fewer public companies and growing demand for diversified retirement options, private equity firms and plan administrators have been advocating for broader access to private markets. Major players like Blackstone, KKR, and Apollo are pushing to offer these strategies to everyday savers through target date funds and pooled investment options.

Regulators are responding, Trump’s executive order is expected to accelerate this trend by instructing the DOL and SEC to build a framework for oversight and access. This move is positioned as a retirement security initiative to democratize access to high-quality investment options, aiming to empower over 90 million Americans currently excluded from alternative asset opportunities.

Potential Benefits

• Higher return potential: Private equity has historically delivered strong long-term performance, with average annual returns nearing 14% compared to ~8% for public equities.

• Diversification: Adding private market exposure can reduce correlation to public stocks and may help smooth volatility over time.

• Tax deferral: Returns on alternative investments in 401(k)s keep the same tax advantages as traditional plan assets.

• Expanded access: Ordinary investors gain exposure to asset classes previously reserved for accredited or institutional investors, democratizing retirement portfolio options.

Risks and Concerns

• Liquidity and transparency: Private investments are harder to value, less liquid, and more complex to manage than traditional funds.

• Fee structures: Management and performance fees are significantly higher than index funds, which can erode participant returns.

• Fiduciary exposure: Plan sponsors carry legal responsibilities under the Employee Retirement Income Security Act (ERISA). If alternatives are misused or misunderstood, liability risk increases.

• Focused investment risk: Private equity funds may concentrate on specific sectors or strategies, which can increase exposure to market shifts or operational volatility.

• Potential for loss: Like all investments, private equity carries risk — including the possibility of capital loss — despite the perception of higher returns.

Regulatory Momentum

The Trump administration’s order builds on a 2020 DOL information letter that cautiously allowed private equity in defined contribution plans — but few sponsors acted. The new order goes further by directing agencies to build consistent frameworks for oversight, pricing, and participant protections.

The order also instructs the SEC to revise applicable regulations to support the inclusion of alternative assets in participant-directed defined contribution plans. The SEC has indicated it may issue new valuation and fee disclosure rules to support this shift.

What Plan Sponsors Should Do

How MGO Can Help

As plan sponsors consider adding private equity or other alternatives to 401(k) lineups, fiduciary responsibilities and audit requirements become more complex. MGO offers guidance to help organizations evaluate these changes, manage risk, and stay compliant with ERISA and DOL expectations.

Our employee benefit plan (EBP) audit team conducts hundreds of 401(k) plan audits annually. We understand the documentation, disclosures, and governance needed to support evolving investment strategies. Whether you’re navigating new guidance, restructuring plan offerings, or preparing for audit readiness, we bring the insight and experience to support your goals. Contact us today to learn how we can help you.

The post Private Equity Access in 401(k) Plans Gains Steam appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Fidelity bonds are not interchangeable with fiduciary or D&O insurance. Each policy type serves a distinct risk category and compliance role. 

• Coverage is required regardless of plan size or audit exemption. Even small plans or those not subject to audit may be noncompliant without proper bonding. 

• Cybersecurity coverage is not automatically included. ERISA bonds must be reviewed to confirm whether cyber-related risks are addressed. 

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Fidelity bonds are known as the fundamental component of safeguarding your employee retirement plans. Required by the Employee Retirement Income Security Act (ERISA), these bonds protect plan assets from any losses due to misappropriation or misuse by the individuals who handle plan funds. Yet, despite the importance of this safeguard, there still exists widespread confusion among plan sponsors and their administrators.  

Read on for further clarification on the key compliance requirements — by correcting five frequently encountered myths about these ERISA fidelity bonds, you can better align with the regulatory expectations and reinforce internal controls.  

Understanding ERISA Fidelity Bond Requirements 

Mandatory Coverage 
ERISA generally mandates that most retirement plans maintain fidelity bond coverage equal to at least 10% of plan assets, with minimum and maximum thresholds. Exceptions apply to certain unfunded, governmental, or church plans. Form 5500, filed annually under penalty of perjury, asks directly about this coverage — so accurate compliance is essential. 

Bond Sourcing and Structure 
The bond must be obtained from an insurer listed on the Department of the Treasury’s approved surety list. It can be issued as a standalone bond or included within a broader insurance policy, but it has to meet ERISA’s first-dollar coverage rule, which prohibits deductibles. 

Covered Individuals 
Anyone with access to plan funds — including fiduciaries and relevant third-party administrators — must be included in the bond’s scope. The coverage has to apply to all plan assets, regardless of asset type or custody arrangements. 

Five Myths That Can Risk Your Compliance 

1. “Our fiduciary insurance covers the ERISA bond requirement.” 
You’ve probably heard this common misunderstanding. That’s because fiduciary liability insurance covers breaches of fiduciary duty, while fidelity bonds cover acts such as theft or embezzlement by those handling funds. Both are important, but not interchangeable. 

2. “Retroactive fidelity bond coverage can fix past gaps.” 
Insurers generally can’t issue retroactive bonds due to legal constraints. Sponsors discovered without coverage during a plan audit must work with the Department of Labor (DOL) to document their remediation efforts and make sure they’re compliant. 

3. “We’re exempt because our plan doesn’t require an audit.” 
The thing is, audit exemptions don’t apply to fidelity bonds. ERISA requires fidelity coverage regardless of the number of plan participants or the size of the plan assets. 

4. “Our D&O insurance includes fidelity coverage.” 
D&O insurance may reference fidelity coverage, but this doesn’t guarantee your compliance with ERISA bonding requirements. For example, many policies include deductibles, which disqualify them under ERISA. You should review each policy carefully. 

5. “The bond protects against cyber theft by default.” 
Some fidelity bonds include provisions related to cybersecurity...but not all do. The DOL encourages plan sponsors to be proactive and assess and supplement your cyber protections. Combination policies can be explored but must still meet ERISA requirements. 

Supporting Plan Integrity Through Review 

Protecting retirement plan assets is both a regulatory obligation and a fiduciary priority. MGO’s Employee Benefit Plan Audit professionals can assist with evaluating your current fidelity bond coverage, identifying potential gaps, and supporting alignment with DOL and ERISA guidelines. Our team brings a detail-oriented, audit-first perspective to strengthen the security and compliance posture of your plan. Contact us to learn more.  

The post ERISA Fidelity Bonds: Dispelling Five Common Misunderstandings  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• A federal court has vacated the DOL’s 2024 rule raising FLSA overtime salary thresholds, eliminating the need for employers to increase salaries on July 1, 2024, or January 1, 2025, to maintain exempt status.

• Employers that already raised salaries in anticipation of the rule must now evaluate whether to maintain, roll back, or freeze those pay levels, considering the overall financial impact, employee morale, and retention risks.

• Pay decisions for future hires should carefully balance the following: internal equity, market trends, and legal considerations, to avoid potential claims of unequal treatment or pay disparities.

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In November, the April 2024 Department of Labor’s (DOL) final rule raising the salary thresholds for being exempt from overtime under the Fair Labor Standards Act was vacated by  the U.S. District Court for the Eastern District of Texas. The ruling applies nationwide and means that employers do not currently need to increase employee salaries on January 1, 2025 to maintain their exempt status. It also vacates the July 1, 2024 increase. For additional context about the final rules that have now been vacated by the court and historical FLSA rates and increases, see BDO’s prior article DOL Releases Final Rule to Increase Salary Thresholds for FSLA White-Collar Exemptions. 

What does the court ruling mean for your company? The July 1, 2024 increase was significant (a 23% increase in the weekly standard salary which translates to a $160 increase, from $684 to $844). For companies that implemented this pay raise, the court’s decision may have potential financial implications for the employees and the employer, and it may also impact future hiring decisions. The table below summarizes some implications and considerations under various scenarios. 

It is also important to remember that the salary test is only one of several tests. Employees are exempt only if they meet the salary threshold and are bona fide executive, administrative, or professional employees.  

Unless the company decides to retain the current pay levels for current and future employees, we encourage consultation with a knowledgeable labor lawyer prior to implementing any changes. and to vet any communication about this issue. 

Written by Judy Canavan. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com 

How MGO Can Help 

At MGO, we understand the complexities and sensitivities involved in navigating shifting employment regulations. Our team can help you assess the financial and organizational impact of the court’s ruling and evaluate options for current and future compensation strategies. Whether you choose to maintain, adjust, or restructure pay practices, we’re here to support you with practical guidance and strategic insight tailored to your workforce and your business goals. Contact us to learn more.  

The post Update: Court Throws Out DOL’s Final FLSA Overtime Rules  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• As of 2024, long-term, part-time (LTPT) employees must be allowed to make salary deferrals into their employer’s 401(k) plans, requiring companies to make sure they’re compliant with SECURE Act regulations.

• Many 401(k) plan service providers are unprepared for the implementation of LTPT employee rules, potentially exposing employees to costly corrective actions and compliance risks.

• Employers should not assume HR and plan providers will handle this automatically; noncompliance could lead to financial penalties, increased administrative costs, and mandatory corrections.

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The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act of 2019) and the SECURE 2.0 Act of 2022 (collectively, SECURE) enacted a new mandate that, starting in 2024, long-term, part-time (LTPT) employees must be allowed to make salary deferrals into their employer’s 401(k) plan.  

The systems used by many 401(k) plan service providers are not ready for the required implementation starting with the first plan year beginning on or after January 1, 2024 (i.e., January 1, 2024, for calendar year plans).  

Some executives may view this change as an issue that does not require their attention and that will be handled by their human resources (HR) staff and the 401(k) plan service providers. But not complying with the rules might be costly for the employer if corrective contributions for LTPT employees who were not allowed to participate are required, along with ancillary costs.  

New Mandate 

For decades, tax-qualified retirement plans could exclude employees who work fewer than 1,000 hours of service per year, even if the employee worked for the employer for many years. Employees who worked over 1,000 hours generally could not be excluded from the plan (with certain non-hours-based exceptions). To improve access to workplace retirement savings plans, the 2019 SECURE Act required 401(k) plans to allow employees who have worked at least 500 hours in three consecutive years (based on employment with the employer from January 1, 2021, onward) to make elective deferrals to the plan. Thus, if an employee had 500 hours of service in 2021, 2022, and 2023 (but never had 1,000 hours of service per year), that employee must be allowed to make salary deferrals into the employer’s 401(k) plans starting with the first plan year beginning on or after January 1, 2024. For plan years beginning in 2025 and later, SECURE 2.0 of 2022 reduces the three-year measurement period to two years.  

On November 27, 2023, the IRS issued proposed regulations that employers can rely on to apply the LTPT employee rules until the final rules are issued.  

An Example of How the Rules Work 

Let’s assume a calendar year 401(k) plan has a requirement that employees must be age 21 and complete 1,000 of service before being eligible for plan participation that includes making elective deferrals and receiving company matching contributions.  Starting in 2024, some employees who do not meet the 1,000-hour service requirement might be eligible to make salary deferrals. The employer is not required to make matching contributions or any other employer contributions for LTPT employees who make salary deferrals.  

Counting the hours worked to determine plan eligibility is not new and the rules are essentially the same for counting 1,000 hours and 500 hours.  Hours for new employees should be counted for 12 months following their date of hire, but the measurement period can be switched to the plan year for administrative ease. However, while the 1,000-hour requirement is a standalone measure for each year, the 500-hour count is relevant for two or three years, depending on the plan year under evaluation.  Therefore, for a calendar year plan beginning January 1, 2024, the hours are counted for 2021, 2022, and 2023.  Any employee whose count is 500 or more but less than 1,000 in each of those three years should be allowed to make elective deferrals into the calendar year plan as of January 1, 2024.   

As a further example, assume Susan was hired on June 1, 2021, by an employer that sponsors a calendar year 401(k) plan. On December 31, 2021, the first plan year end after Susan’s hire date, the employer switches her hours worked to be measured based on the plan year.  Year One for Susan runs from June 1, 2021, through May 31, 2022.  Year Two for Susan runs from January 1, 2022, through December 31, 2022, and Year Three for Susan runs from January 1, 2023, through December 31, 2023.  Susan worked 500 hours in Year One, 680 hours in Year Two, and 520 hours in Year Three.  Therefore, effective January 1, 2024, she should be allowed to make elective deferrals under the plan.  Note that the switch from counting hours based on Susan’s date of hire anniversary to using the plan year as her eligibility computation period causes the hours she worked from January 1, 2022, through May 31, 2022, to be double counted in both her first and second year.  

Even though vesting schedules have no relevance to Susan’s elective deferrals (since she is always 100% vested in her own contributions), she will receive a year of vesting credit for each year after 2021 that she works at least 500 hours (i.e., Susan has three years vesting credit if she became eligible for employer contributions in 2024). This would be significant if she subsequently becomes eligible to participate in the plan for a reason that is not solely on account of being an LTPT employee. Once an individual is eligible for the plan, they remain eligible and do not have to requalify to participate. 

For the 2025 plan year, the period from June 1, 2022, through May 31, 2022, will drop out of the determination. Additionally, the period from January 1, 2022, through December 31, 2022, will drop out of the determination because of the change made by SECURE 2.0 to look back only two years instead of three. Accordingly, Susan’s 2025 plan eligibility as an LTPT employee will be based on her hours worked during the 2023 and 2024 plan years. 

The future years’ determination is complicated, especially if the employee’s hours worked fluctuate above and below 1,000 hours.  

Why Should I be Concerned? 

While employers are not required to match the LTPT employee deferrals and LTPT employees are excluded from the annual tests that otherwise apply to all employees (e.g., coverage, nondiscrimination, and top-heavy requirements), there might be some increased cost to the plan sponsor for including LTPT employees in the 401(k) plan. Employers should consider the following potential increases in plan cost due to the new LTPT employee mandate.  

1. Increased Plan Audit Expense -The additional participants due to LTPT employee status must be counted when determining if the 401(k) plan must have an annual independent audit of the plan’s financials.  Starting with the 2023 plan year, 401(k) plans that have more than 100 participant accounts as of the first day of the 2023 plan year must have an annual independent audit. Before 2023, 401(k) plan participants who were eligible to make salary deferrals were counted as participants — even if they did not contribute anything — for purposes of counting the number of participants. The DOL changed the rules starting in 2023, among other things, to include only those with account balances as participants. Keep in mind that the number of participants can be decreased by taking advantage of rules that allow distributions of small account balances (accounts valued at less than $7,000 starting in 2024) to former participants.  

2. Increased Plan Administration Costs – The time spent internally and by plan service providers increases as the number of plan participants increases, particularly if recordkeeping for a new category of participants is necessary. The LTPT employee rules raise unique recordkeeping challenges necessitating new programing and new procedures to stay in compliance.  

3. Costly Corrective Actions – The employer must take steps to correct any instance of when an employee that is eligible to make elective deferrals was not notified of being eligible.  Increasing the number of eligible employees increases the possibility of someone being missed.  But the immediate concern is based on feedback that many administration systems are not ready for the implementation of the LTPT rules as early as January 1, 2024 (for calendar year plans).  Any delay in communicating the eligibility to LTPT employees that causes a delay of payroll deductions of elective deferrals beyond their eligibility date would be an operational failure that would need correction under the IRS’s Employee Plans Compliance Resolution System (EPCRS).  While corrective contributions to make up the employee’s missed contribution are not always required, notices would need to be provided to any participant that had a missed deferral period to advise them that their future retirement savings might need adjustment due to the delay in making elective deferrals.  

4. Decreased Forfeitures – LTPT employees earn vesting credit for each year after 2021 during which they work at least 500 hours but less than 1,000 hours. While the vested percentage has no impact on the years the employer does not make contributions on the employee’s behalf, vesting as an LTPT employee carries over to any years that the employee becomes eligible for employer contributions.   

5. Operational Compliance Before Plan Amendment Deadline – For a 401(k) plan to be “qualified” (that is, eligible for favorable tax treatment), it must comply with the statutory requirements in both form and in operation. SECURE provides that the written plan document is not required to be amended until the end of the 2025 plan year. However, the plan must operate in compliance with the applicable changes in the law for all plan years, starting with the effective date of the change. Since the LTPT rules took effect for plan years beginning on or after January 1, 2024, the 401(k) plan would need to be operated with those rules starting in 2024, even though a formal, written plan amendment is not required until the end of the 2025 plan year. Therefore, any decisions regarding compliance with the LTPT employee provisions should be documented and the proper procedures and controls put in place.   

While plan sponsors might rely on their 401(k) plan service providers to identify eligible LTPT employees, liability for noncompliance remains on the employer. The risk associated with not allowing LTPT employees to make elective deferrals to a 401(k) plan can be avoided if the plan lowers the 1,000-hour requirement to not more than 500 hours or determines eligibility on the elapsed time method instead of the counting hours method of determining eligibility to make salary deferrals under the plan.   

SECURE provides numerous exceptions from coverage, nondiscrimination, and top heaviness tests for employees who participate in the plan solely on account of the LTPT employee provisions. Any employee that satisfies the more generous plan document provisions will not qualify for the confusing rules that otherwise apply to LTPT employees. Still, avoiding LTPT employee status altogether might be cost effective.   

How MGO Can Help 

MGO is here to help you maneuver the complexities of the SECURE Act’s LTPT employee requirements—which can be challenging. Our team of professionals can assist with compliance strategies, plan amendments, and operational adjustments to make sure your 401(k) plan meets regulatory requirements while minimizing your risks and costs.

Whether you need guidance on eligibility tracking, recordkeeping updates, or strategic plan design, we can help you with solutions that keep you compliant and your retirement plan running smoothly. Contact us today to stay ahead of these challenges with confidence. 

Written by Joan Vines and Norma Sharara. Copyright © 2024 BDO USA, P.C. All rights reserved. www.bdo.com 

The post New Requirement to Cover Long-Term Part-Time Employees in 401(k) Plans Enters Into Effect appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Nonprofits are facing an escalating cybersecurity threat, with a 30% increase in cyberattacks in 2024, making it imperative for your organization to prioritize robust security measures.  

• The financial and operational impact of cyberattacks is severe, with data breaches costing nonprofits up to $2million and ransomware demands rising by nearly $1 million in just one year. 

• AI is transforming cybersecurity by enhancing threat detection, automating responses, and predicting future attacks, offering nonprofits a powerful tool to strengthen their defenses.   

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As we step into 2025, the importance of cybersecurity for nonprofit organizations cannot be overstated. The digital landscape is fraught with evolving threats that pose significant risks to the operations, reputation and financial stability of nonprofits. This article aims to highlight the critical importance of cybersecurity for nonprofits, backed by recent statistics and trends, and to persuade executives and board members to prioritize this issue. Additionally, we will explore how BDO can assist in navigating these challenges and how artificial intelligence (AI) will play a pivotal role in defending against cyberattacks. 

The BDO Benchmarking industry surveys noted that mitigating cybersecurity is in the top tier of IT challenges for 2025.  

The Growing Threat Landscape 

Nonprofit organizations are increasingly becoming prime targets for cybercriminals. According to Integrity360¹, nonprofits experienced a 30% year-over-year increase in the number of weekly cyberattacks in 2024. This alarming statistic underscores the vulnerability of nonprofits, which often lack the robust cybersecurity measures found in for-profit enterprises. 

In 2024, 68% of breaches involved a human element, such as phishing or human error. This highlights the critical need for comprehensive cybersecurity training and awareness programs. The financial implications of cyberattacks on nonprofits are profound, with the average cost of a data breach reaching up to $2 million. This includes costs related to data recovery, legal fees and reputational damage control. 

Financial and Operational Impacts 

The financial impact of cyberattacks on nonprofits can be devastating. The average ransom demanded in a ransomware attack increased by nearly $1 million in 2024 compared to 2023. Despite this, very few organizations that paid the ransom received all their data back. Such incidents not only disrupt operations but also erode trust among donors and beneficiaries. 

Nonprofits often operate on limited budgets, dedicating most of their funds to fulfilling their missions. This financial constraint makes it challenging to invest in advanced cybersecurity measures. However, the cost of inaction is far greater. Cyberattacks can lead to identity theft, loss of donor trust and diversion of precious funds to mitigate the damage. 

The Need for Proactive Cybersecurity Measures 

Given the increasing digitalization of nonprofit operations, from online fundraising to managing beneficiary data, it is imperative for nonprofits to adopt proactive cybersecurity measures. Unfortunately, many nonprofits are ill prepared. A staggering 78% of organizations feel their cyber resilience is insufficient to meet their needs. This gap in preparedness makes nonprofits attractive targets for cybercriminals. 

To address these challenges, nonprofits must prioritize cybersecurity at the executive and board levels. This involves not only investing in technology but also fostering a culture of cybersecurity awareness and resilience. Regular training, robust data protection policies and incident response plans are essential components of a comprehensive cybersecurity strategy. 

The Role of AI in Cybersecurity 

AI is revolutionizing the field of cybersecurity by enhancing threat detection, response and prevention capabilities. Here are some top ways AI is being utilized in cybersecurity: 

1. Threat Detection and Prevention: AI systems can analyze vast amounts of data to identify patterns and anomalies that may indicate a cyber threat. Machine learning models establish baseline behaviors and detect deviations, enabling real-time threat detection and rapid response. 

2. Automated Response: AI can automate routine cybersecurity tasks such as log analysis, vulnerability scanning and incident response. By automating these processes, AI frees up human analysts to focus on more complex and strategic activities. 

3. Behavioral Analysis: AI-powered systems can monitor user behavior and network traffic to detect unusual activities. For example, AI can identify phishing attempts by analyzing email content and user interactions. 

4. Predictive Capabilities: AI’s predictive analytics can anticipate potential cyberattacks by analyzing historical data and identifying trends. This allows organizations to implement preventive measures and strengthen their defenses against future threats. 

5. Enhanced Security Operations: AI enhances the capabilities of security operations centers (SOCs) by providing advanced threat intelligence and automated incident response. AI-driven tools can correlate data from multiple sources, prioritize alerts and provide actionable insights to security teams. 

6. Vulnerability Management: AI can continuously scan for vulnerabilities in systems and applications, providing real-time updates and recommendations for patching. This helps organizations stay ahead of potential exploits and reduce their attack surface.

Conclusion 

As we prepare to navigate the complexities of 2025, cybersecurity must be a top priority for nonprofit organizations. The risks are too significant to ignore, and the consequences of inaction can be devastating. By investing in robust cybersecurity measures and partnering with experts like BDO, nonprofits can safeguard their operations, protect their beneficiaries and continue to fulfill their vital missions with confidence. 

For executives and board members, the message is clear: Cybersecurity is not just an IT issue; it is a critical component of organizational resilience and success. Taking proactive steps today can secure a safer tomorrow for your organization and the communities and stakeholders you serve. 

How MGO Can Help 

 At MGO, we understand the unique cybersecurity challenges facing your nonprofit organization. Our team of professionals provides personalized cybersecurity assessments, risk management strategies, and AI-powered solutions to help you strengthen your defenses. From implementing proactive security measures to offering compliance guidance and incidence response planning, we work closely with your executives and board members to build a resilient cybersecurity framework. Contact us to learn how we can help you protect your data, maintain donor trust, and focus on your mission with confidence.  

Written by Ric Opal. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com 

The post The Crucial Role of Cybersecurity for Nonprofit Organizations in 2025 appeared first on MGO CPA | Tax, Audit, and Consulting Services.

MGO’s clients need a trusted partner to handle their 401(k) plan audits. We provide cost-effective, efficient service while offering insights into broader financial knowledge and regulatory complexities unique to each client’s business model. Our clients span industries ranging from manufacturing, technology, and apparel to food and beverage, professional services, and more. 

Challenge:  

When a company has 100 or more participants with balances in a 401(k) plan, it requires a 401(k) audit. A company needs an employee benefit plan audit provider that understands its unique business model and can help them navigate evolving regulatory requirements while maintaining transparency for employees and stakeholders. This calls for a nuanced understanding of employee classification, contribution eligibility, and plan participation rules.  

Additionally, with federal regulations governing employee benefit plans constantly evolving, a company needs an auditor with deep experience in ERISA, IRS, and DOL compliance standards for full regulatory adherence. 

Approach: 

When it comes to 401(k) audits, efficiency is key. By leveraging extensive industry knowledge and a thorough methodology, our team provides a seamless 401(k) audit experience that meets compliance and financial reporting requirements.  

Our risk-based approach addresses the complexities of a company’s diverse workforce and definitions of compensation — supporting proper classification and compliance with evolving ERISA, IRS, and DOL regulations. This approach allows us to provide cost-effective 401(k) audits to our clients. 

Value to Client:  

Our efficient approach provides a thorough and timely 401(k) audit, strengthening a company’s financial oversight and reinforcing trust among employees and stakeholders. By delivering a compliance-focused 401(k) audit, we help companies navigate complex regulatory compliance with confidence.  

Beyond the 401(k) audit, our insights into plan administration and financial controls highlight our deep understanding of employee benefit plan audits. Our strategic guidance positions us as a trusted advisor — often leading to invitations to bid on a company’s full-scale financial audit as well as other services. 

Need Help with Your 401(k) Audit? 

At MGO, we offer comprehensive audits covering all aspects of your 401(k) plan to help you achieve compliance and transparency. Reach out to our team today to learn about our Employee Benefit Plan Audits. 

The post Case Study: Simplifying 401(k) Compliance for Plan Sponsors appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• The DOL’s VFCP update is now effective and includes a self-correction path for limited ERISA fiduciary breaches.

• Self-correction applies to certain late deposits and loan errors with lost earnings of $1,000 or less.

• Plan sponsors must correct issues within 180 days and retain documentation, even without a DOL no-action letter.

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Understanding the VFCP Update

Effective compliance with fiduciary responsibilities under ERISA remains key to managing your employee benefit plans. While many plan sponsors maintain strong oversight, errors can and do occur, so it’s important to be vigilant. The Department of Labor (DOL) has long offered a path to voluntary remediation through the Voluntary Fiduciary Correction Program (VFCP) to address certain fiduciary breaches. 

As of March 17, 2025, the VFCP includes a new Self-Correction Component (SCC), which provides additional flexibility to resolve specific issues without submitting a full application. This enhancement may influence how plan sponsors approach correction procedures going forward. 

What Is the Voluntary Fiduciary Correction Program? 

Ultimately, the DOL established the VFCP to encourage fiduciaries to voluntarily correct losses suffered by employee benefit plans due to breaches of ERISA fiduciary duties. The program provides a structured process to help you address specific fiduciary violations that resulted in financial harm to the plan. 

According to DOL guidance, as a plan sponsor who’s complete the VFCP process, you may: 

• Avoid potential civil enforcement actions by the DOL. 

• Gain greater clarity around your fiduciary responsibilities. 

• Help restore your plan integrity by remediating errors. 

Fiduciaries can apply to the VFCP if they are not currently “under investigation” as defined by the program. The standard process includes compiling documentation, calculating corrective payments (including lost earnings), and submitting a complete application package. If the DOL concurs with the submission, it issues a “no action” letter, which indicates that no further enforcement will be pursued for the corrected issue. 

How the VFCP Update Impacts Fiduciary Correction Procedures 

DOL’s recent update to the VFCP introduces the Self-Correction Component (SCC), simplifying the correction process for certain limited ERISA compliance failures. The SCC went into effect on March 17, 2025. 

What the SCC Covers 

Under the SCC plan, sponsors and fiduciaries may resolve certain issues without submitting a full VFCP application. Instead, you will need to submit a notice through DOL’s online tool. Note that the SCC applies only to the following situations: 

• Delinquent participant contributions or loan repayments — if the total lost earnings are $1,000 or less. 

• Eligible inadvertent participant loan failures, where you didn’t comply with plan provisions such as repayment schedules or loan limits.

Process and Documentation Requirements 

Unlike the traditional VFCP, SCC submissions don’t result in a no-action letter. Instead, the DOL simply acknowledges receipt of the submission. While this doesn’t carry the same legal weight, it does demonstrate a fiduciary’s good-faith effort to correct the issue. 

To qualify: 

• Your corrections must be completed within 180 days of failure or withholding. 

• You should monitor remittances more frequently — monthly or per payroll — rather than relying solely on year-end reviews. 

Fiduciaries must also complete the SCC Record Retention Checklist and provide documentation to the plan administrator, including: 

• A written explanation of the error 

• Proof of correction and payment of lost earnings 

• Results from DOL’s Online Calculator 

• Updated procedures to prevent recurrence. 

• SCC notice acknowledgment and summary 

• A signed Penalty of Perjury Statement

Practical Considerations 

While SCC offers a more efficient resolution pathway, it’s not a replacement for fully correcting prohibited transactions under ERISA. Plan sponsors should assess whether additional process improvements — such as remittance tracking or loan monitoring — are necessary to help prevent recurring issues. 

Other Correction Options Outside the VFCP 

The VFCP isn’t the only method available to you to correct fiduciary breaches. In some cases, plan sponsors may choose to correct issues outside the program. This typically involves: 

• Restoring affected amounts to the plan, including lost earnings. 

• Filing IRS Form 5330 to report and pay any excise tax. 

These steps generally resolve the issue — from the IRS’s perspective. However, the DOL may still view the error as a fiduciary breach under ERISA. Because of this, you may want to opt to use the VFCP to limit your potential enforcement exposure. 

It’s critical that you continuously monitor any errors and resolve them quickly to maintain your ERISA compliance and safeguard your plan assets.  

The Path Ahead 

Further guidance from the DOL may clarify whether the SCC applies only to transactions occurring on or after March 17, 2025, or retroactively to earlier events. On March 18, 2025, DOL released a model Notice to Interested Parties to support SCC submissions. 

You should evaluate which correction path — VFCP, SCC, or an alternative — is most appropriate based on the facts and timing of each case. 

Supporting Plan Sponsors with Regulatory-Focused Audit Services 

MGO provides employee benefit plan audit services tailored to meet the complex and evolving requirements of ERISA, DOL, and IRS regulations. Considering updates to programs like the Voluntary Fiduciary Correction Program, accurate reporting and proactive oversight are critical. Our experience spans a wide range of plan types — including 401(k), 403(b), defined benefit, and health and welfare plans — allowing us to deliver audit services aligned with fiduciary responsibilities and regulatory expectations. We assist plan sponsors in meeting their obligations with confidence in today’s dynamic compliance environment. Contact us to learn more.  

The post Guide to Navigating DOL’s Update to Voluntary Fiduciary Correction Program appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• As of January 1, 2025, new 401(k) and 403(b) plans must automatically enroll eligible employees with contributions escalating annually—and certain small businesses and older plans are exempt.  

• Employees who are 60 to 63 can contribute significantly more to their retirement plans, with increased limits based on inflation adjustments.  

• SECURE 2.0 reduces the service requirement for long-term, part-time employees to participate in 401(k) plans from three years to two, boosting retirement savings opportunities.  

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With the new year underway and a new administration in D.C. getting settled, change is inevitable. However, there are new employee benefit plan provisions taking effect in this year, driven by existing laws such as the Employee Retirement Income Security Act of 1974 (ERISA) and the Setting Every Community Up for Retirement Enhancement Act of 2022 (SECURE 2.0). Let’s dive in.  

Mandatory Automatic Enrollment for New Plans 

SECURE 2.0 established new requirements for new 401(k) and 403(b) plans adopted after December 29, 2022. As of January 1, 2025, employers must automatically enroll eligible employees into these plans with an initial deferral percentage that is between 3% and 10% of compensation. Automatic contributions escalate by at least 1% per year up to a deferral rate of at least 10% but not more than 15% (10% until January 1, 2025). Participants can opt out of automatic enrollment or automatic escalation at any time.  

The following may be exempt from the new requirements: 

• Plans in effect on or before December 29, 2022. 

• Organizations in existence for less than three years. 

• Businesses with fewer than 10 employees. 

• Church and governmental plans.

Catch-up Contribution Increases 

The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) first introduced catch-up contribution provisions as a way to help older workers increase retirement savings. Under EGTRRA, plan sponsors could voluntarily amend their plans to allow participants aged 50 and older to contribute additional amounts to their 401(k), 403(b), and 457(b) plans. Prior to December 31, 2024, catch-up contributions to these plans were limited to $7,500, as indexed.  

For taxable years beginning after December 31, 2024, those contribution limits change. Participants aged 60 to 63 may make additional contributions of either (i) $11,250 or (ii) 150% of their 2024 contribution limit, as indexed for inflation after 2025. 

For SIMPLE IRA plans, before December 31, 2024, participants in SIMPLE IRA plans that allow catch-ups could contribute up to $3,500. In 2025, such contributions rely on the participant’s age (50 to 59, or age 64 or older on December 31, 2025) and the company’s number of employees. Depending on these factors, a participant’s contributions above regular deferrals can total between $3,850 and $5,250. 

Coverage of Long-Term Part-Time Employees 

The original SECURE Act required employers to include certain part-time employees in their 401(k) plans. To be eligible, the employee must have worked at least 500 hours per year for at least three consecutive years and must be at least 21 years old as of the end of that three-year period. The employee also would earn vesting credits for all years with at least 500 hours of service. 

SECURE 2.0 reduces the three-year period to two years for plan years beginning after December 31, 2024. However, service performed before January 1, 2021, is disregarded for both eligibility and vesting purposes.  

Although SECURE 2.0 extends this rule to apply to 403(b) plans that are subject to ERISA, the rule does not apply to union plans or defined benefit plans. 

Distributions for Certain Long-Term Care Premiums 

Plan participants may receive distributions of up to $2,500 per year to pay for quality long-term care insurance without triggering the 10% early withdrawal penalty that might otherwise apply. This optional change for plan sponsors becomes effective for distributions made after December 29, 2025.  

The Lost and Found Database 

Retrieval or management of retirement funds can be complicated when workers move from job to job. To help reunite participants and their missing retirement plans, SECURE 2.0 required the Employee Benefits Security Administration to provide a search tool or database of benefits by December 29, 2024. At this time, participation is voluntary, but some groups are concerned about the breadth of information initially requested by the Department of Labor to populate the database.  

Is Your Plan Ready for 2025? 

By staying informed and prepared, plan sponsors can navigate these changes effectively. You should proactively review and adjust all your plans accordingly to make sure you’re staying compliant with the new mandates.  

How MGO Can Help 

With 2025 underway and new employee benefit plan regulations taking effect, staying compliant and maximizing your plan efficiency is more important than ever. MGO’s Audit team can provide you with guidance to help you implement required changes, optimize contributions, and make sure your plan meets the regulatory standards. We’re here to assist with compliance reviews, plan amendments, and any strategic planning you need to support your organization’s success for the long-term. Contact us to learn how we can help you prepare for 2025.  

The post Planning for 2025: Employee Benefit Plan Changes Taking Effect  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Starting in 2024, long-term, part-time (LTPT) employees must be allowed to make salary deferrals to 401(k) plans if they work at least 500 hours per year for two consecutive years (down from the previous three-year requirement).

• Many 401(k) plan service providers are not fully prepared for the implementation of these changes, posing the risk of operational failures, costly corrective contributions, and compliance issues for employers.

• Employers need to carefully plan for SECURE Act compliance to avoid increased plan administration expenses, potential audits, and corrective actions resulting from overlooking LTPT employees.

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The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act of 2019) and the SECURE 2.0 Act of 2022 (collectively, SECURE) enacted a new mandate that, starting in 2024, long-term, part-time (LTPT) employees must be allowed to make salary deferrals into their employer’s 401(k) plan.  

The systems used by many 401(k) plan service providers are not ready for the required implementation starting with the first plan year beginning on or after January 1, 2024 (i.e., January 1, 2024, for calendar year plans).  

Some executives may view this change as an issue that does not require their attention and that will be handled by their human resources (HR) staff and the 401(k) plan service providers. But not complying with the rules might be costly for the employer if corrective contributions for LTPT employees who were not allowed to participate are required, along with ancillary costs.

New Mandate

For decades, tax-qualified retirement plans could exclude employees who work fewer than 1,000 hours of service per year, even if the employee worked for the employer for many years. Employees who worked over 1,000 hours generally could not be excluded from the plan (with certain non-hours-based exceptions). To improve access to workplace retirement savings plans, the 2019 SECURE Act required 401(k) plans to allow employees who have worked at least 500 hours in three consecutive years (based on employment with the employer from January 1, 2021, onward) to make elective deferrals to the plan. Thus, if an employee had 500 hours of service in 2021, 2022, and 2023 (but never had 1,000 hours of service per year), that employee must be allowed to make salary deferrals into the employer’s 401(k) plans starting with the first plan year beginning on or after January 1, 2024. For plan years beginning in 2025 and later, SECURE 2.0 of 2022 reduces the three-year measurement period to two years.

On November 27, 2023, the IRS issued proposed regulations that employers can rely on to apply the LTPT employee rules until the final rules are issued.

An Example of How the Rules Work

Let’s assume a calendar year 401(k) plan has a requirement that employees must be age 21 and complete 1,000 of service before being eligible for plan participation that includes making elective deferrals and receiving company matching contributions.  Starting in 2024, some employees who do not meet the 1,000-hour service requirement might be eligible to make salary deferrals. The employer is not required to make matching contributions or any other employer contributions for LTPT employees who make salary deferrals.  

Counting the hours worked to determine plan eligibility is not new and the rules are essentially the same for counting 1,000 hours and 500 hours.  Hours for new employees should be counted for 12 months following their date of hire, but the measurement period can be switched to the plan year for administrative ease. However, while the 1,000-hour requirement is a standalone measure for each year, the 500-hour count is relevant for two or three years, depending on the plan year under evaluation.  Therefore, for a calendar year plan beginning January 1, 2024, the hours are counted for 2021, 2022, and 2023.  Any employee whose count is 500 or more but less than 1,000 in each of those three years should be allowed to make elective deferrals into the calendar year plan as of January 1, 2024.   

As a further example, assume Susan was hired on June 1, 2021, by an employer that sponsors a calendar year 401(k) plan. On December 31, 2021, the first plan year end after Susan’s hire date, the employer switches her hours worked to be measured based on the plan year.  Year One for Susan runs from June 1, 2021, through May 31, 2022.  Year Two for Susan runs from January 1, 2022, through December 31, 2022, and Year Three for Susan runs from January 1, 2023, through December 31, 2023.  Susan worked 500 hours in Year One, 680 hours in Year Two, and 520 hours in Year Three.  Therefore, effective January 1, 2024, she should be allowed to make elective deferrals under the plan.  Note that the switch from counting hours based on Susan’s date of hire anniversary to using the plan year as her eligibility computation period causes the hours she worked from January 1, 2022, through May 31, 2022, to be double counted in both her first and second year.  

Even though vesting schedules have no relevance to Susan’s elective deferrals (since she is always 100% vested in her own contributions), she will receive a year of vesting credit for each year after 2021 that she works at least 500 hours (i.e., Susan has three years vesting credit if she became eligible for employer contributions in 2024). This would be significant if she subsequently becomes eligible to participate in the plan for a reason that is not solely on account of being an LTPT employee. Once an individual is eligible for the plan, they remain eligible and do not have to requalify to participate. 

For the 2025 plan year, the period from June 1, 2022, through May 31, 2022, will drop out of the determination. Additionally, the period from January 1, 2022, through December 31, 2022, will drop out of the determination because of the change made by SECURE 2.0 to look back only two years instead of three. Accordingly, Susan’s 2025 plan eligibility as an LTPT employee will be based on her hours worked during the 2023 and 2024 plan years. 

The future years’ determination is complicated, especially if the employee’s hours worked fluctuate above and below 1,000 hours.  

Why Should I be Concerned?

While employers are not required to match the LTPT employee deferrals and LTPT employees are excluded from the annual tests that otherwise apply to all employees (e.g., coverage, nondiscrimination, and top-heavy requirements), there might be some increased cost to the plan sponsor for including LTPT employees in the 401(k) plan. Employers should consider the following potential increases in plan cost due to the new LTPT employee mandate.  

1. Increased Plan Audit Expense -The additional participants due to LTPT employee status must be counted when determining if the 401(k) plan must have an annual independent audit of the plan’s financials.  Starting with the 2023 plan year, 401(k) plans that have more than 100 participant accounts as of the first day of the 2023 plan year must have an annual independent audit. Before 2023, 401(k) plan participants who were eligible to make salary deferrals were counted as participants — even if they did not contribute anything — for purposes of counting the number of participants. The DOL changed the rules starting in 2023, among other things, to include only those with account balances as participants. Keep in mind that the number of participants can be decreased by taking advantage of rules that allow distributions of small account balances (accounts valued at less than $7,000 starting in 2024) to former participants.  

2. Increased Plan Administration Costs – The time spent internally and by plan service providers increases as the number of plan participants increases, particularly if recordkeeping for a new category of participants is necessary. The LTPT employee rules raise unique recordkeeping challenges necessitating new programing and new procedures to stay in compliance.  

3. Costly Corrective Actions – The employer must take steps to correct any instance of when an employee that is eligible to make elective deferrals was not notified of being eligible. Increasing the number of eligible employees increases the possibility of someone being missed. But the immediate concern is based on feedback that many administration systems are not ready for the implementation of the LTPT rules as early as January 1, 2024 (for calendar year plans). Any delay in communicating the eligibility to LTPT employees that causes a delay of payroll deductions of elective deferrals beyond their eligibility date would be an operational failure that would need correction under the IRS’s Employee Plans Compliance Resolution System (EPCRS).  While corrective contributions to make up the employee’s missed contribution are not always required, notices would need to be provided to any participant that had a missed deferral period to advise them that their future retirement savings might need adjustment due to the delay in making elective deferrals.  

4. Decreased Forfeitures – LTPT employees earn vesting credit for each year after 2021 during which they work at least 500 hours but less than 1,000 hours. While the vested percentage has no impact on the years the employer does not make contributions on the employee’s behalf, vesting as an LTPT employee carries over to any years that the employee becomes eligible for employer contributions.   

5. Operational Compliance Before Plan Amendment Deadline – For a 401(k) plan to be “qualified” (that is, eligible for favorable tax treatment), it must comply with the statutory requirements in both form and in operation. SECURE provides that the written plan document is not required to be amended until the end of the 2025 plan year. However, the plan must operate in compliance with the applicable changes in the law for all plan years, starting with the effective date of the change. Since the LTPT rules took effect for plan years beginning on or after January 1, 2024, the 401(k) plan would need to be operated with those rules starting in 2024, even though a formal, written plan amendment is not required until the end of the 2025 plan year. Therefore, any decisions regarding compliance with the LTPT employee provisions should be documented and the proper procedures and controls put in place.   

While plan sponsors might rely on their 401(k) plan service providers to identify eligible LTPT employees, liability for noncompliance remains on the employer. The risk associated with not allowing LTPT employees to make elective deferrals to a 401(k) plan can be avoided if the plan lowers the 1,000-hour requirement to not more than 500 hours or determines eligibility on the elapsed time method instead of the counting hours method of determining eligibility to make salary deferrals under the plan.   

SECURE provides numerous exceptions from coverage, nondiscrimination, and top heaviness tests for employees who participate in the plan solely on account of the LTPT employee provisions. Any employee that satisfies the more generous plan document provisions will not qualify for the confusing rules that otherwise apply to LTPT employees. Still, avoiding LTPT employee status altogether might be cost effective. 

How MGO Can Help

We are here to help support you in navigating the complexities of the new LTPT requirements under the SECURE Act. Our experienced team can help you assess your current 401(k) plan structures, identify potential gaps in compliance, and implement necessary updates to align with the new rules. We can assist with plan design modifications, administrative processes, and reducing risks associated with LTPT employee compliance. Reach out to our team today to take a proactive approach to SECURE Act compliance. 

Written by Joan Vines and Norma Sharara. Copyright © 2024 BDO USA, P.C. All rights reserved. www.bdo.com 

The post New Requirement to Cover Long-Term, Part-Time Employees in 401(k) Plans Enters Into Effect appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• The SECURE Act and SECURE 2.0 Act have expanded access to retirement plans for long-term, part-time employees (LTPTs), who must now be included if they meet certain criteria starting January 1, 2024.

• The method of counting participants for Form 5500 has changed and now focuses on account balances instead of eligibility to defer contributions, complicating participant headcounts.

• The updated rules may alter whether a retirement plan requires an annual audit based on participant count, especially affecting organizations with previously excluded LTPT employees.

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There are two significant regulatory changes to retirement plans that will require immediate attention from plan sponsors — both to ensure current operational compliance and comply with any upcoming deadlines. Many of your long-term, part-time (LTPT) employees may now be eligible for 401(k) retirement plans, and there is also a new method of counting defined contribution retirement plan participants on Form 5500 Annual Return/Report. You should note that your retirement plan’s audit status could be affected when these changes take effect.

In addition to understanding the far-reaching implications that could help you avoid any missteps with LTPT employee eligibility and revised participant headcounts, it’s also crucial to understand any missteps that may have already occurred.

Navigating New Eligibility Opportunities for Long-Term, Part-Time Employees

Prior to the SECURE Act of 2019 and SECURE 2.0 Act of 2022 (collectively SECURE), you as an employer could exclude employees from your tax-qualified defined contribution plans based on the number of hours they worked per year. Typically, this meant that part-time employees were ineligible to contribute to their employer’s retirement plan — no matter how many years they had worked for you. Note that an IRS Employee Plans Newsletter issued on January 26, 2024, defined LTPT employees as workers who have worked at least 500 hours per year in three consecutive years (although the consecutive year condition will be reduced to two years in 2025).

SECURE expanded LTPT employee access to their employer retirement plans by requiring 401(k) plans to allow employees that meet the LTPT requirements to make elective deferrals starting with the first plan year beginning on or after January 1, 2024. As an employer, you are not required to make employer contributions for LTPT employees.

However, the burden of identifying, notifying, and enrolling these newly eligible LTPT employees does now fall on you. Failing to inform LTPT employees of their eligibility as of January 1, 2024, may have resulted in non-compliance. To rectify any compliance issues, you can check out the IRS amnesty program known as the Employee Plans Compliance Resolution System (EPCRS).

It is essential to understand this new requirement because LTPT employee eligibility may affect two other administrative functions for plan sponsors: Form 5500 filing and the annual employee benefit plan audit requirement. 

A Key Change When You Count Participants for Form 5500

Prior to 2023, IRS Form 5500 — an essential part of ERISA’s reporting and disclosure framework — required defined contribution retirement plan sponsors to include employees who were eligible to make elective deferrals on the first day of the plan year. In most organizations, LTPT employees would be excluded from this headcount unless the employer’s plan allowed them to make contributions to the retirement plan.

Now, employers need only include participants with an account balance in the defined contribution retirement plan as of the first day of the plan year (but, for new plans, the participant account balance count is determined as of the last day of the first plan year). This may sound like a simple change, but the potential increase in participants who are LTPT employees complicates the matter.  

The Impact on Your Plan’s Audit Requirement

Your organization’s obligation to have an annual audit of its retirement plan is dependent on the number of plan participants as of the first day of the plan year.  

Beginning with the 2023 plan year, defined contribution plans that have more than 100 participant accounts as of the first day of the 2023 plan year generally must have an annual independent audit. Before 2023, all plan participants who were eligible to make salary deferrals were included in headcounts as participants even if they had not made any plan contributions. The DOL changed the rules starting in 2023 to include only those with account balances as participants. Keep in mind that the number of participants can be decreased by taking advantage of rules that allow distributions of small account balances (accounts valued at less than $7,000 starting in 2024) to former participants, if the defined contribution plan adopted these provisions. 

The audit requirement of plans with 100 or more employees may change since employees without account balances are no longer counted. An organization may find that the defined contribution plan no longer requires an audit if eligible employees have not contributed to the 401(k) plan, but the audit requirement may be triggered when previously excluded LTPT employees begin to make elective deferrals. 

Understanding the New Normal for Certain Retirement Plans 

The LTPT employee rules take effect for plan years beginning on or after January 1, 2024 (for calendar-year end plans). If your organization missed the deadline to allow LTPT employees to participate in your plan, the good news is that there is a path to compliance. However, implementing these complicated changes in the law requires in-depth knowledge of the complex issues surrounding tax-qualified retirement plans.  

Experienced consultants can provide guidance and support throughout the process in the following ways: 

• Analyze plan documents and employee data to identify any compliance gaps or issues that need to be addressed 

• Engage in detailed discussions with plan sponsors to explain the intricacies of the changes and helping them understand the necessary steps to ensure compliance 

• Facilitate communication with service providers to aid in a smooth transition and implementation of any required changes 

• Calculate corrective actions required to rectify any non-compliance issues and confirm future compliance 

• Guide the employer in enrolling in the IRS’s amnesty program (EPCRS), if necessary, to self-report non-compliance issues 

• Help plan sponsors track the path taken to incorporate the necessary changes into the plan documents, to ensure ongoing compliance and avoid future issues 

• Discuss Form 5500 preparation considerations, including participant head count

How MGO Can Help 

Our team is equipped to help you navigate the complex changes brought about by the SECURE Act and SECURE 2.0 Act. We can analyze plan documents and employee data to identify your compliance gaps and make sure your LTPT employee eligibility is properly addressed. From guidance on Form 5500 reporting requirements to understanding/implementing the necessary changes to participant headcounts, we can guide you through compliance issues and penalty pitfalls. Reach out to our team today to learn how we can help you.

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