Form 5500
Certain employee benefit plans subject to ERISA are requried to file an annual report with the federal government. The Form 5500 and its related schedules satisfy that requirement.
Who is Required to File the Form 5500?
Every group health and pension plan that is subject to ERISA is required to file a Form 5500, with the following exceptions:
- Welfare plans with less than 100 participants which are unfunded, insured, or a combination of unfunded and insured.
- Certain fringe benefit plans including group legal services, educational assistance programs, and adoption assistance plans.
- Church and governmental plans (since they are not subject to ERISA).
- A Section 125 Cafeteria Plan is not subject to ERISA. Thus, one is not required to file a Form 5500. However, the qualified benefits under the cafeteria plan (such as health FSA, medical plan, etc.) may be subject to ERISA and Form 5500 filing.
Beginning with the 2009 plan year, 403(b) plans that are subject to ERISA must now file a complete Form 5500 filing along with all applicable schedules. Affected plans may include plans for employees of public schools, employees of certain tax-exempt organizations, and certain ministers. Governmental plans, nonelecting church plans, and 403(b) plans that are not "employee benefit plans" under Title I of ERISA continue to be exempt from filling a Form 5500.
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When is the Form 5500 Due?
Plans must submit the Form 5500 and related schedules by the last day of the seventh month following the end of the plan year. For a calendar year plan, the deadline would be July 31st. A two-and-a-half month extension may be filed on Form 5558.
The Form may be submitted electronically through the online ERISA Filing Acceptance System (EFAST) or a hard copy may be mailed to the Employee Benefits Security Administration (EBSA). Plans will be required to file electronically for plan years beginning January 1, 2009.
Form 5500 Electronic Filing
All pension and welfare plans required to file a Form 5500 are now required to electronically file using the new EFAST2 system designed by the Department of Labor's (DOL) Employee Benefits Security Administration (EBSA). Calendar year plans will be the first group to utilize the new electronic filing system and the filings will be due July 31, 2010 without an extension (Form 5558), or October 15, 2010 with an extension. Paper forms will no longer be accepted, with a few exceptions including plan sponsors eligible to file a Form 5500-EZ and delinquent and amended 2008 plan year filings.
Plan administrators may file their Form 5500s electronically using one of two methods. The first method is using the DOL's IFILE report preparation and submission application for free. However, the IFILE software is only capable of submitting single filings and does not integrate with other systems to automatically populate required information. IFILE also does not contain filing assistance or integrated instructions. The DOL expects that 10% of filers will use the IFILE submission application.
The second method is using EFAST2 approved third-party software vendors. A list of approved software vendors may be reviewed on the DOL website.The benefits to using third-party software vendors may include integration and population of data, filing assistance and integrated instructions or customer service assistance, and file sharing functionality. The DOL expects that 90% of filers will use third-party software vendors.
Plan sponsors who utilize a third-party software vendor will need to register for credentials and a PIN through the EFAST2 website. Click here to begin the registration process.
Plan sponsors who will be submitting the filing to EFAST2 will need to register for credentials as a "Transmitter" user type. Plan sponsors who will be signing the filing will need to register for credentials as the "Filing Signer" user type.
Once credentials are obtained, plan sponsors will work with their third-party administrators or use the third-party software to complete and submit the Form 5500 filing. The EFAST2 system includes a validation feature, which is a method of error-checking before submitting the filing. If a filing is improperly submitted, an amended return using the EFAST2 system will need to be filed.
Please contact your advisor with questions about the new process.
FAQs
Our retirement plan has less than 100 participants. Does that mean we do not have to file a Form 5500?
All qualified retirement plans must file the Form 5500 regardless of the number of participants. The small plan exception for less than 100 participants applies to welfare plans, not pension plans.
What if a plan is required to file a Form 5500 and has not done so in several years?
Failure to submit a Form 5500 could result in the plan administrator being assessed a fine up to $1,100 per day for each day the filing is late. Additionally, a willful failure to comply could result in a criminal penalty of $100,000, ten years in prison, or both. However, relief is available under the Department of Labor's Delinquent Filer Voluntary Compliance (DFVC) Program for plans that voluntarily comply before being notified of the deficiency by the DOL.
Under the DOL's DFVC Program, the penalties are reduced to $10 per day with a maximum limit of $750 for a small plan and $2,000 for a large plan. If the plan is delinquent on multiple years' filings, the small plan limit is $1,500 and the large plan limit is $4,000.
To comply, the plan must submit a completed Form 5500 with appropriate schedules to the Employee Benefits Security Administration (EBSA). Additionally, a copy of the Form 5500 (without the Schedules) and payment of the penalty must be submitted to the DFVC Program.
Additional information on the DFVC Program is available on the DOL website.
View DOL DFVC Program information »
How do I attach the audit report and the extension, if any?
The audit report needs to be documented on letterhead, signed, and then saved as a single Portable Document Format (PDF) file. That PDF file then needs to be attached to the Form 5500 annual return. When you submit the Form 5500 annual return, the attachments will be transmitted to EFAST2 along with the rest of the information in the annual return.
Regarding the extension of time, you do not need to attach a copy of the Form 5558 that was filed with the Internal Revenue Service to the annual return in EFAST2. You must, however, keep a copy of the Form 5558 that was filed with the Internal Revenue Service with the plan's records.
I am a plan administrator that needs to electronically sign a Form 5500. Can I tell my preparer or my advisor what my PIN is so they can sign and submit it for me?
As the plan administrator, the Form 5500 that will be sent to EFAST2 must be examined by you before it is submitted. Your signature attests that has been done and that, to the best of your knowledge and belief, it is true, correct, and complete. Since the EFAST2 PIN is the plan administrator or plan sponsor's electronic signature for purposes of the filing, PINs must be protected and not shared.
Exactly what time is my filing due, and what time zone does that reflect?
Timely returns must be received by EFAST2 by midnight in the plan administrator's time zone. The plan administrator's time zone is determined by the plan administrator's address specified on Line 3a of the Form 5500 or Form 5500-SF.
In an instance where the filer attempts to submit a return on time and it is not successfully received by EFAST2 prior to the deadline, the filer should print the unsuccessful submission notice. The unsuccessful submission notice should be included with the re-submitted return/report and tagged as an “other attachment.” Based upon the facts and circumstances surrounding the original unprocessable submission and the subsequent re-submission, penalties may still be assessed from the original due date if the subsequent re-submission is received by EFAST2 after the deadline.
Additional Resources
The DOL has dedicated a portion of their website for assistance with Form 5500 Electronic Filing questions and resources.
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