Waiver of Plan Audit

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on July 11, 2023

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What Is a Waiver of Plan Audit?

A waiver of plan audit is a permission granted by regulatory authorities to certain retirement plans, exempting them from undergoing a detailed audit of their financial and operational activities.

Plan audits are essential for ensuring the financial stability, compliance, and proper administration of retirement plans. They provide valuable information to plan participants and regulators, helping to maintain trust and confidence in the retirement system.

Retirement plans may request a waiver of plan audit to reduce the administrative burden and cost associated with conducting audits. Obtaining a waiver can lead to significant savings in time and resources, provided the plan meets specific eligibility criteria.

Eligibility Criteria for Waivers of Plan Audits

Types of Retirement Plans Eligible

Not all retirement plans are eligible for a waiver of plan audit. Generally, small plans or plans with a limited number of participants may be more likely to qualify for a waiver, depending on the specific regulatory environment.

Size of Plan and Participant Count

Retirement plans with fewer participants or assets may be eligible for a waiver, as they represent a lower risk to the overall retirement system. The exact threshold for size and participant count may vary by jurisdiction and regulatory authority.

Financial Stability and Solvency

Plans requesting a waiver must demonstrate financial stability and solvency, ensuring that they can meet their obligations to plan participants without requiring additional oversight from regulators.

Compliance With Regulatory Requirements

Retirement plans seeking a waiver must have a strong history of compliance with all applicable laws and regulations. This includes timely submission of required reports, maintaining accurate records, and adhering to investment guidelines.

Application Process for Waivers of Plan Audits

Documentation Required

To apply for a waiver, retirement plans must provide the following documentation:

  1. Plan Documents and Amendments: Copies of the plan's governing documents and any subsequent amendments.

  2. Financial Statements: Financial statements for the most recent fiscal year, prepared in accordance with applicable accounting standards.

  3. Compliance Certificates: Certificates demonstrating compliance with relevant laws and regulations.

Documentation Required for a Waiver of Plan Audit

Submission Process

The submission process for waiver applications may vary by jurisdiction and regulatory authority, and may include options for online or paper submission. Be sure to verify the specific requirements and deadlines for your plan's jurisdiction.

Application Fees and Waivers

Some jurisdictions may charge a fee for processing waiver applications, while others may offer fee waivers for certain types of retirement plans. Research your plan's specific situation to determine whether a fee applies and if a waiver is available.

Review and Approval Process

Regulatory Authorities Involved

The review and approval process for waiver applications is typically handled by the regulatory authorities responsible for overseeing retirement plans in your jurisdiction. This may include national or state-level agencies.

Evaluation Criteria

Regulatory authorities will evaluate waiver applications based on the plan's eligibility criteria, including the size of the plan, the number of participants, financial stability, and compliance history.

Timeline for Decision

The timeline for receiving a decision on a waiver application may vary by jurisdiction and regulatory authority. It is essential to submit your application well in advance of the audit deadline to ensure a timely decision.

Communication of Decision

Regulatory authorities will communicate their decision on waiver applications through written correspondence, which may be delivered electronically or by mail. Be sure to maintain accurate records of all correspondence related to your waiver application.

Implications of Receiving a Waiver of Plan Audit

Reduced Administrative Burden

Obtaining a waiver of plan audit can significantly reduce the administrative burden on retirement plan administrators, freeing up time and resources for other important tasks.

Cost Savings

In addition to saving time, a waiver of plan audit can also result in cost savings for retirement plans, as the expenses associated with conducting audits can be substantial.

Potential Risks and Consequences

Reduced Oversight and Transparency

While a waiver of plan audit can offer benefits, it may also lead to reduced oversight and transparency for the retirement plan. Participants and regulators may have limited access to information about the plan's financial health and operations.

Potential for Non-compliance

Plans with a waiver of plan audit must remain vigilant about maintaining compliance with all applicable laws and regulations. The reduced scrutiny may lead to accidental non-compliance, which could result in penalties or other consequences.

Maintaining Waiver of Plan Audit Status

Ongoing Compliance

Even with a waiver of plan audit, retirement plans must continue to adhere to all other compliance requirements, including maintaining accurate records, following investment guidelines, and submitting any other required reports.

Periodic Reviews and Renewals

Regulatory authorities may periodically review retirement plans with a waiver of plan audit to ensure continued eligibility. Plans may also be required to renew their waiver status on a regular basis, depending on the specific regulations in their jurisdiction.

Reporting Changes Affecting Waiver Eligibility

If a retirement plan experiences changes that could affect its waiver eligibility, such as a significant increase in assets or participants, the plan administrator must notify the relevant regulatory authority and potentially submit updated documentation.

Maintaining Waiver of Plan Audit Status


Understanding the waiver of plan audit process is essential for retirement plan administrators seeking to reduce the administrative burden and costs associated with plan audits while maintaining compliance with applicable laws and regulations.

While obtaining a waiver of plan audit can offer significant benefits, including cost savings and reduced administrative tasks, it also comes with potential risks, such as reduced oversight and transparency.

Plan administrators must carefully weigh these factors when considering whether to pursue a waiver.

Regardless of waiver status, retirement plans must remain vigilant in maintaining compliance with all applicable regulations and monitoring their financial health to ensure the continued well-being of plan participants.

Regular reviews and updates to plan documents and procedures are essential for ensuring ongoing compliance and stability.

Waiver of Plan Audit FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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