Kriste DeAngelo Speaks at NJSCPA Conference
On May 7, Kriste Naples-DeAngelo presented the session “Accounting and Auditing Update on Employee Benefit Plans” during the New Jersey Society of Certified Public Accountants’ annual Employee Benefits Conference. Kriste presented a high-level view of new accounting topics in the benefit plan space, looked back at standards implemented in the prior year, and discussed best practices.
Among a variety of other topics, Kriste spoke on the implications of plan mergers, acquisitions and terminations. These types of transactions are becoming more common for employee benefit plans, yet accounting for them is a complex assignment for both the plan sponsor and third-party administrators involved.
Kriste highlighted the fact that the physical asset transfer date is not necessarily the effective date of the transaction. Instead, plan sponsors should determine the effective date based on board resolutions, plan amendments and minutes of board meetings. Once the appropriate date is determined, the plan custodians need to coordinate the ownership of the assets at the measurement date. This is where much of the complexity lies and it benefits plan sponsors to facilitate this discussion to ensure proper accounting and reporting of assets.
Finally, Kriste reminded participants that for a terminating plan or a plan that is being merged into another plan, the annual audit, if required, may be able to be deferred if the plan was in existence for less than 7 months of the plan year. If that is the case, 2 plan years may be audited simultaneously.
As with all complex employee benefit plan transactions, sponsors should consider consultation with their ERISA attorney to ensure that the transaction is handled appropriately.