Fiduciary Accounting and Retirement Funds under Heavier Scrutiny

It’s hard to remember a time when investing has ever been more volatile. Wall Street’s gyrations and the improprieties of the big investment firms (Goldman Sachs and company) have made retirement investments in particular more uncertain. The federal government will also be taking a stronger role in fund oversight, complicating the picture.

Case in point is the increased oversight of 403(b) plans. The IRS now requires that these retirement plans (similar to the popular 401(k)s but run by non-profit organizations instead of corporations) be held to stricter accountability, to the extent that larger plans must now have their financial statements audited by an independent auditor. Additionally, certain asset transactions are limited and subject to tight monitoring. Plan sponsors must now also generate extensive documentation about the plan’s benefits, eligibility, distributions, and contribution limits. And that’s just for starters.

Such increased attention to the actual numbers is wholesale across the investing landscape. This puts fiduciaries under even more pressure to produce accurate, precise documentation. As a subset, fiduciary accounting is now held to a higher standard than before. Fiduciaries are well served to retain an outside fiduciary accounting service to review the work of their in-house accountants or to handle their primary bookkeeping.