How have the requirements for good governance in employee benefit plans changed?
Jeffrey Mamorsky: The most important governance issues currently confronting retirement plans involve the implementation of the new internal control operational compliance rules in Statement of Accounting Standards (SAS) 112/115 issued by the American Institute of Certified Public Accountants (AICPA). As part of the annual financial audit of a retirement plan required by ERISA, auditors are now required to verify that there are internal controls in place that enable the employer plan sponsor to self-monitor it. The self-monitoring must cover financial efficiency of the plan, effective internal controls with regard to administration, and most important, that the plan is being operated in accordance with the plan document and all applicable law. Craig Miller: Why are these new requirements in place? Jeffrey Mamorsky: Plan auditors send a letter to the employer sponsoring the plan asking management to represent that the plan is operated in accordance with its terms and all applicable law.
