County of San Mateo, Defined Contribution Plan Audit Services

The County sponsors a voluntary defined contribution (DC) retirement program alongside its mandatory defined benefit (DB) retirement plan. The DB assets total almost $1 billion as of 12/31/2025 and consists of five plans:

• §457 Voluntary Plan, $946 million
• §401a Mandatory Plan, $22 million
• §457 OBRA Plan, $17 million
• §401a OBRA Plan (closed), $8 million
• §401a Money Purchase Plan, $5 million
• TOTAL, $998 million

The number of participants in each plan are as follows. Note that some participants are eligible and are participating in multiple plans.

• §457 Voluntary Plan, 9,762
• §401a Mandatory Plan, 1,245
• §457 OBRA Plan, 3,098
• §401a OBRA Plan (closed), 2,219
• §401a Money Purchase Plan, 49
• TOTAL, 16,373

The intended scope of the DC plan audits includes the following:

• Financial Reporting & Statement Audit : Verification of the plan's financial accuracy, including the statement of net assets available for benefits and changes in net assets.
• Participant Data & Eligibility Testing: Review of participant data such as enrollment, birth dates, and hire dates for eligibility compliance.
• Contribution and Payroll Review: Verification that employee and employer contributions are accurately calculated, correctly allocated, and deposited in a timely manner (payroll remittance testing).
• Internal Controls Review: Evaluate internal controls over contributions, distributions, payroll remittances, recordkeeper oversight, etc.
• Distribution and Loan Testing: Review of participant loans and distributions for proper authorization and compliance with plan documents.
• Participant Investment Review: Analysis of investment valuation and allocation.
• Administrative Expense Check: Verification of the legitimacy of expenses paid by the plan.
• Compliance with Plan Document & Regulations: Checking that the plan is operating according to its written document and regulatory requirements.
• Documentation Review: Reviewing signed plan documents, amendments, committee meeting minutes, and summary plan descriptions.

The County DC plan previously has not been independently audited. The Deferred Compensation Advisory Committee (DCAC, the plan's governing body) made the decision to obtain a voluntarily audit. The initial audit will be the baseline audit. The DCAC intends annual audits.