Does Form 5500 Reporting Apply to Your Retirement Plan?

Form 5500, the Annual Return/Report of Employee Benefit Plan, was developed by the Internal Revenue Service (IRS), the Employee Benefits Security Administration (EBSA), and the Pension Benefit Guaranty Corporation (PBGC). Plan sponsors use this form to satisfy annual reporting requirements, as mandated by the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code.  EBSA has the authority to penalize employers for failing to properly report Form 5500 or Form 5500-SF. Therefore, timely and accurate reporting is vital to compliance.

Who Files Form 5500

If your retirement plan is covered by ERISA and includes 100 or more participants at the start of the plan year, you must file Form 5500.

Benefit plans that may be covered by ERISA include the following:

  • 401(k) plans, profit-sharing plans, stock bonus plans, and money purchase plans
  • Certain annuity arrangements
  • Individual retirement accounts set up by the employer
  • Church pension plans that elect ERISA coverage under IRC section 410(d)
  • Medical, dental, life, and disability insurance plans

If the plan has fewer than 100 participants, you may need to file Form 5500-SF instead of Form 5500. Form 5500-SF is a shorter, simpler version of Form 5500. To be eligible for Form 5500-SF reporting, among other things, the plan must not be a multi-employer plan, and it must not hold any employer securities or be required to undergo auditing of its records by an independent qualified public accountant.

Note that the 100-participant threshold determines whether you should file a Form 5500 or Form 5500-SF includes current and former employees.

The IRS and EBSA have specific guidelines for those who should not file a Form 5500. For example, small welfare benefit plans—specifically, those with fewer than 100 participants at the start of the plan year—may not need to file the form if they are either unfunded or fully insured, or both partially unfunded and partially insured.

What to Report on Form 5500

The purpose of Form 5500 is to let the IRS, EBSA, and PBGC know how the plan is being operated and determine whether it’s in compliance with relevant laws. To achieve those two objectives, Form 5500 requests specific information, such as the plan sponsor (typically the employer), the plan administrator (the person responsible for running the plan), current and former employees participating in the plan, service providers, plan assets and liabilities, plan contributions and distributions, and insurance contracts used to provide insurance benefits.

How and When to File

Form 5500 and Form 5500-SF must be filed electronically via EFAST2, which is designed by the IRS, EBSA, and PBGC. Generally, plan administrators must file Form 5500 or Form 5500-SF by the final day of the seventh month that comes after the end of the plan year, unless an extension was obtained by filing Form 5558 with the IRS. The extension, which lasts two and a half months, can be taken only once.

Still not sure whether this applies to you? Call us today to learn more about when and how to accurately file Form 5500.

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