When is a 401(k) plan audit required under ERISA?

A 401(k) plan audit is required when the plan is considered a large plan under ERISA and must include an independent auditor’s report with the annual Form 5500 filing. The requirement depends on the number of participants with account balances at the beginning of the plan year.

What participant count triggers a 401(k) plan audit?

A plan generally requires an audit when it has 100 or more participants with account balances at the beginning of the plan year. Plans with fewer than 100 participants with account balances are generally treated as small plans and typically do not require an audit.

What is the 80-120 participant rule for 401(k) plan audits?

If a plan has between 80 and 120 participants with account balances at the beginning of the plan year and it filed as a small plan in the prior year, it may be able to continue filing as a small plan and avoid an audit.

Where can you find the number of participants with account balances?

You can find the number of participants with account balances on your Form 5500 filing. You can also contact your third-party administrator (TPA) to confirm the count and determine whether an audit requirement applies.

Key Takeaways

Q: What happens if a required 401(k) audit is not completed?

Failing to obtain a required audit can lead to Department of Labor penalties, rejected Form 5500 filings, and potential fiduciary exposure, so addressing the requirement early is important.

401(k) audit requirement: A plan audit is required under ERISA once the plan reaches 100 or more participants with account balances at the beginning of the plan year.
Participant count matters: Audit requirements are based on participants with account balances, not total eligible employees.
80–120 participant rule: Plans in this range may continue filing as a small plan and avoid an audit if they qualified in the prior year.
Noncompliance risks: Failing to obtain a required audit can result in DOL penalties, rejected Form 5500 filings, and fiduciary exposure.
Experienced CPA support: Working with a firm that specializes in 401(k) audits helps ensure compliance while improving plan governance and internal controls.

If your company offers a 401(k) plan, compliance with the U.S. Department of Labor (DOL) and IRS regulations isn’t optional; it’s essential. Once your plan reaches a certain size, an independent audit is required under the Employee Retirement Income Security Act (ERISA).

At CMP, we specialize in employee benefit plan audits, including 401(k) plans. Our team combines technical expertise with a client-focused approach that streamlines the audit process.

Do You Need a 401k Plan Audit for 2025

When is a 401(k) Audit Required?

Under ERISA, large 401(k) plans must attach an independent auditor’s report to their annual Form 5500 filing. Whether an audit is required depends on the number of participants with account balances at the beginning of the plan year.

Plan Type	Participant Count	Audit Requirement
Large Plan	100+ participants with account balances	Audit Required
Small Plan	Fewer than 100 participants with account balances	No Audit Required
80-120 Participant Rule	Between 80 and 120 participants with account balances (and filed as a small plan in the prior year)	May continue as a small plan and avoid an audit

You can find the number of participants with account balances on your Form 5500 filing or contact your TPA.

If you are unsure which category your plan falls into for 2025, your TPA can help determine whether the audit requirement applies.

Failing to obtain a required audit can result in DOL penalties, rejected Form 5500 filings, and potential fiduciary exposure, making timely compliance critical.

Why Choose CMP for Your 401(k) Audit?

1. 401(k) Audit Expertise: We perform 401(k) audits year-round. Our understanding of plan operations, participant eligibility, contributions, distributions, and investment reporting allows us to identify issues early and keep your audit on track.

2. Regulatory Confidence: We stay up to date on DOL, IRS, and GAAP requirements to ensure your plan’s financial statements comply with all requirements and avoid unnecessary risks.

3. Personalized Attention: At CMP, you work directly with experienced professionals who understand your plan and your business. We prioritize communication, responsiveness, and a smooth audit experience.

4. Value Beyond Compliance: Our audit process includes practical recommendations to enhance internal controls, improve plan governance, and reduce administrative risk, supporting both your organization and your employees’ financial future.

Ready to Simplify Your 401(k) Audit?

Partner with CMP for a smart, efficient, and fully compliant audit process. If your plan will require a 401(k) audit, contact us early to secure your place on our audit schedule.

Do You Need a 401(k) Plan Audit for 2025?

Key Takeaways

When is a 401(k) Audit Required?

Why Choose CMP for Your 401(k) Audit?

Ready to Simplify Your 401(k) Audit?