N.Y. Comp. Codes R. & Regs. Tit. 9 § 9005.1 - Financial statements, auditing and agreed-upon procedures reports

The board, with respect to the State plan, and the deferred compensation committee, with respect to any other plan, shall be responsible for causing such plan to be in compliance with this section for each plan year.

(a) Subject to subdivision (c) of this section, a plan shall be subject to this subdivision for a plan year if the plan has fewer than 100 participants as of the last day of the plan year. If a plan is subject to this subdivision for a plan year, the deferred compensation committee shall:

(1) prepare, or cause to be prepared, for the plan year an unaudited financial statement of the net assets available for benefits and the related statements of changes in net assets available for benefits for the plan year-end; and

(2) engage, or cause to be engaged, in accordance with the requirements of Part 9003 of this Title, a certified public accountant to conduct a review of the plan's activities during the plan year and to produce an agreed-upon procedures report for the plan year, which report shall specify the procedures and the results of the procedures by such firm of certified public accountants in the review of each of the following items (and any other additional items as may be required by the deferred compensation committee for the plan):

(i) whether participant account balances, by investment option and in the aggregate as of the plan-year end, as reported by the administrative service agency for the plan, agree to the value of the assets held by the trustee of the plan by investment option and in the aggregate as of plan-year end;

(ii) whether participant deferrals reported by the plan sponsor, by individual participant and in the aggregate, for the plan year agree with the deferrals received by the trustee of the plan for the plan year;

(iii) whether participant deferrals for the plan year were properly authorized and accurately remitted to the trustee of the plan in accordance with the timing and other requirements of the plan document (or industry practice if no direction is provided in the plan document);

(iv) whether the plan properly and separately accounted for pre-tax and, if applicable, designated Roth contributions deferred or contributed for the plan year;

(v) whether maximum contribution limitations and minimum required distribution requirements were properly implemented for the plan year;

(vi) whether participant requests for lump sum and installment benefit distributions for the plan year were properly authorized and processed in accordance with the plan document and contractual provisions (or industry practice, if no direction is provided in the plan document or applicable contracts);

(vii) whether participant requests for unforeseeable emergency withdrawals during the plan year were processed according to written procedures, properly authorized and properly documented;

(viii) whether participant requests for plan loans during the plan year were processed according to written procedures and were properly authorized and documented;

(ix) whether participant requests for deferral amount changes and asset allocation changes for the plan year were processed accurately and in a timely manner in accordance with the plan document and applicable contract provisions (or industry practice, if no direction is provided in the plan document or applicable contracts);

(x) whether all plan-level and participant-level fees for the plan year were disclosed to participants, were allocated in accordance with written procedures and on a uniform basis and were assessed solely to support operations of the plan; and

(xi) whether, for the plan year, employees who were eligible during that plan year to elect to participate in the plan were provided with written notification of the plan and enrollment opportunities.

(3) The specific procedures and methods applied to each item covered by paragraph (2) of this subdivision shall be determined in the professional judgment of the certified public accountant in accordance with generally accepted industry standards in conjunction with the deferred compensation committee for the plan prior to the firm's performance of the agreed-upon procedures on the plan.

(b) A plan shall be subject to this subdivision for a plan year if it is the State plan or, subject to subdivision (c) of this section, if the plan has 100 or more participants as of the last day of the plan year. If a plan is subject to this subdivision for a plan year, the board or deferred compensation committee, as applicable, shall:

(1) prepare, or cause to be prepared, a financial statement of the net assets available for benefits and the related statements of changes in net assets available for benefits for the plan year-end, which statements shall be prepared in accordance with Governmental Accounting Standards Board Statement 32, "Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans", or any successor statement thereto; and

(2) engage, or cause to be engaged, in accordance with the requirements of Part 9003 of this Title, a certified public accountant to conduct an audit of the financial statements described in paragraph (1) of this subdivision in accordance with auditing standards generally accepted in the United States of America.

(c) The following rules shall apply to plans that would otherwise become subject to subdivision (a) or (b) of this section (or cease to be subject to subdivision [a] or [b] of this section) from one plan year to the next succeeding plan year as a result of an increase or decrease in the number of participants in the plan.

(1) A plan that:

(i) was subject to subdivision (a) of this section for a prior plan year and that has complied with the requirements set forth in subdivision (a) of this section for that plan year; and

(ii) becomes subject to subdivision (b) of this section for the current plan year by virtue of having 100 or more participants as of the last day of the current year, may elect to comply with the provisions of subdivision (a) of this section for such current plan year, and, if such election is made, shall not be subject to the requirements of subdivision (b) of this section for the current year.

(2) A plan that:

(i) was subject to subdivision (b) of this section for a prior plan year; and

(ii) would be subject, but for the operation of this paragraph, to subdivision (a) of this section for the current plan year by virtue of having fewer than 100 participants as of the last day of the current plan year, shall be required to continue to comply with the provisions of subdivision (b) of this section for such current plan year and shall not become eligible to utilize the procedures in subdivision (a) of this section.

(3) Example: Plan X has 90 participants as of the last day of Plan Year 1, and accordingly, the deferred compensation committee of Plan X causes the plan to comply with the financial statement and agreed-upon procedures requirements described in subdivision (a) of this section with respect to Plan Year 1. On the last day of Plan Year 2, Plan X has 110 participants. Plan X may elect to continue to comply with the provisions of subdivision (a) of this section and will not be subject to the audit requirements of subdivision (b) of this section for Plan Year 2.

(4) Example. Plan Y has 110 participants as of the last day of Plan Year 1, and accordingly, the deferred compensation committee of Plan Y causes the plan to comply with the financial statement and audit requirements described in subdivision (b) of this section with respect to Plan Year 1. On the last day of Plan Year 2, Plan Y has 90 participants. Plan Y must continue to comply with the provisions of subdivision (b) of this section and will not be permitted to rely on the agreed-upon procedures provisions of subdivision (a) of this section for Plan Year 2.

(d) The deferred compensation committee for a plan subject to subdivision (a) of this section for a given plan year may elect to comply with the requirements of subdivision (b) of this section for such plan year.

(e) For purposes of this section, participant means any person who, as of the last day of a plan year, has an account balance under the plan that is greater than zero.

(f) The agreed-upon procedures requirement described in paragraph (a)(2) of this section and the audit requirement described in paragraph (b)(2) of this section shall be completed by no later than six months following the end of the plan year to which such agreed-upon procedures or audit relates. Provided, however, for a plan year that ended on or after December 31, 2010 and before December 31, 2011, the agreed-upon procedures or audit relating to such plan year shall be completed by no later than 12 months following the end of such plan year.

(g) The board or deferred compensation committee, as applicable, for a plan shall adopt and communicate to plan participants written procedures whereby a plan participant may request in writing or electronically to receive the financial statements and agreed-upon procedures report described in paragraph (a)(2) of this section and the audited financial statements and accompanying auditors report described in paragraph (b)(2) of this section at no cost to the participant other than a reasonable charge for copying and postage. The board or deferred compensation committee, as applicable, will be deemed to have satisfied the requirements of this subdivision if participants:

(1) are able to obtain the applicable reports and financial statements for the plan; or

(2) are directed to a web site associated with the plan or the State or local employer sponsor of the plan that contains such information in a readily readable and downloadable format.

(h) The board or deferred compensation committee, as applicable, shall file with the president a complete and accurate copy of the financial statements and agreed-upon procedures report described in paragraph (a)(2) of this section or the audited financial statements and accompanying auditors report described in paragraph (b)(2) of this section promptly following delivery of such statements and reports to the board or deferred compensation committee, as applicable.

(i) The provisions of this section shall be in effect for each plan year of a plan ending on or after December 31, 2010.

Notes

N.Y. Comp. Codes R. & Regs. Tit. 9 § 9005.1