Distribution Package

Purpose

The purpose of the Distribution Package is to determine that payments were made in accordance with plan provisions, made to, or on behalf of eligible participants, and transactions are recorded in the proper account, amount, and period. (AAG-EBP 5.187)

Population tab

The Population tab is a schedule of all benefit distributions or withdrawals for the current plan year. This tab includes a count of the number of payments which is the population for the sample of payments to be tested.

Testing tab

The Testing tab breaks out the distribution, vesting percent, and fees by money source to recalculate the net distribution.

Years of Service calculates the participants length of service based on the termination date or plan year end if the participant has not been terminated.

Sample

The workpaper will include the following information regarding the sample:

1. Population Source: Distribution Payments from Population Tab
2. Population Amount: Total Gross Distribution Amount
3. Population Count: Number of Payments
4. Sampling Unit: Individual Payment >$0.00
5. Seed Number: This number can be used to regenerate the sample selection
6. Sample Methodology: Sample methodology chosen by auditor. See Sampling Considerations section.

Testing Procedures

AuditMiner testing procedures are as follows (AAG-EBP 5.189):

1. Obtained the distribution request form, verified authorization, and agreed the name, date, type, and gross amount.
2. Agreed the date of termination to an employee signed document or to support in the personnel file.
3. Reviewed the plan document regarding eligibility requirements and types of distributions
   available. Verified that the participant or beneficiary was eligible to receive the distribution.
4. Recomputed distribution amount based on plan provisions and related documents, benefit
   election, age, vesting, fees, outstanding loans, and withholdings.
5. Recomputed forfeited balances based on the vesting provisions of the plan and service history.
6. Verified the distribution amount agrees with the amount deducted from the participant's
   recordkeeping statement.
7. Agreed payment amount, check date, and payee to cancelled check without exception. For ACH's, obtained the ACH request form and agreed routing number and/or account number to payment confirmation.
8. Verified taxes withheld appear properly calculated and in accordance with participant's request. Per federal requirements, noted a 20% federal tax is withheld on all cash distributions, other than hardship withdrawal and withdrawals that are rolled over directly into a qualified retirement plan.
9. If a hardship withdrawal, reviewed proof of hardship and verified the reason against the plan document. If the plan elected for the safe harbor option, noted participant election on hardship withdrawal form.