First-Year & Large Plan Audit

A first-year plan audit is the first independent examination of a benefit plan’s financial statements, required once the plan grows into large-plan status under ERISA and the Department of Labor. It covers the same areas as any plan audit, contributions, distributions, participant data, investment activity, and internal controls, and often includes procedures on beginning balances since no prior-year audit exists.

First-year engagements carry extra setup because opening balances, plan documents, and historical records have to be established before the audit can conclude.

The requirement is triggered when a plan crosses the participant threshold for the first time, and it applies across retirement and funded welfare plans.

• Plans reaching 100 or more eligible participants for the first time.
• Participants are counted based on those with account balances at the beginning of the plan year.
• Plans that can no longer rely on the 80-120 rule to file as a small plan.
• Fast-growing sponsors who should prepare ahead of crossing the threshold.

• Beginning-of-year balances and opening account data.
• Employee and employer contributions, including timeliness of remittances.
• Participant eligibility, enrollment, and census data.
• Distributions, loans, forfeitures, and investment activity.
• Internal controls and compliance with the plan document.

Modus helps you get your first-year plan audit done at the speed of business. Its AI-native platform automates the most time-intensive fieldwork and streamlines the extra setup a first audit requires, such as establishing opening balances, which is how a Modus-supported audit can target a turnaround of roughly four weeks. Workpapers are source-linked, so each figure traces back to its supporting document.

That efficiency changes your experience. Modus’s platform cuts the document requests and questions your team fields, so a first audit feels far less daunting than sponsors expect.

• Top-firm audit rigor at a middle-market price.
• A target turnaround of roughly four weeks to keep your first Form 5500 deadline comfortable.
• Source-linked workpapers and clear guidance through a first-time process.
• Up to roughly 50% fewer questions for your team during fieldwork.