The primary fiduciary duty owed to the participant is in accordance with the Employee Retirement Income Security Act of 1974 (ERISA). Basically, the law embodies the collection of all contributions related to the rights of the fund. Any contribution arrears are considered a prohibited prepayment to the employer.
However, every plan may not always be possible and in some cases, collection of fees may be excluded for obvious reasons. What is meant by clear reasons are reasons that have gone through a justifiable audit process, in this case, a compliance audit.
What is a compliance audit?
A compliance audit is a review of an employer to assess whether the person has complied with all provisions of the collective bargaining agreement in accordance with the trust documents surrounding the agreement. Essentially this is a review of the employer’s ability to meet its obligations.
The points in a compliance audit can be described as follows:
– The employer’s contribution has reached the agreed value (within the agreed range).
– Complete participant data as a basis for determining eligibility.
– Monitoring on employers.
– Avoidance of qualified opinion.
Any compliance audit process must begin with a detailed understanding of the agreement that includes audits of taxes, payroll records, and any funding arrangements. With a thorough audit process, auditors can determine whether an employer/company is avoiding certain payments or even hiring non-union employees. It takes experienced staff to carry out a detailed compliance audit process but in many cases, the number of obligations to be met can be large and they may be constantly updated. It is not possible to always use a 100 percent manual approach that is prone to human error.
An automated approach with compliance audit software is required! But what kind of software? Which one?
There are many compliance audit software “off the shelf” but not all of them can carry out a credible audit process as only software made by well-known developers can be relied on and if you ask us which one, we will recommend Nimonik compliance audit software.
Nimonik compliance audit software can automate all processes involved in compliance management including document management, risk identification, continuous monitoring, and much more. With this software, any complex compliance audit process can be carried out much more easily. There are reasons behind that:
– Abundant audit templates
There are at least more than 2 thousand free audit templates provided by Nimonik. Using one of Nimonik’s free audit templates can save you significant audit time. However, if you need something truly specific to your company’s audit needs, you can upload your own company audit template and distribute it to all your subordinate organizations.
– Easy audit scheduling
With Nimonik compliance audit software, audit scheduling can be done more easily as long as all relevant audit information has been input. The audit scheduling feature can be personalized in the sense that it can be tailored in as much detail as possible to your company’s compliance obligations.
– Easier collaboration
With Nimonik compliance audit software, audits can be done offline or online on your mobile device. For your information, Nimonik software supports Android and Apple. All evidence obtained in the audit process can be synchronized and redistributed to all staff for analysis.
– Instant report generation
All audit reports can be generated in popular formats such as Word, Excel, and PDF. Then they can be shared easily.
It can be concluded that compliance audits are very relevant to the needs of modern companies regarding ERISA and for this reason, Nimonik compliance audit software can help simplify all processes within the audit framework.