The Form 5500 filing is an annual report that must be filed by employers who sponsor employee benefit plans in the United States. It serves as a highly important disclosure document for plan participants, beneficiaries, and the federal government. It provides all the information regarding the financial condition, investments, and operations of the plan.
The form is required by the Department of Labor (DOL), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC). It plays a vital role in ensuring compliance with the Employee Retirement Income Security Act (ERISA) and other related regulations.
Who Must File Form 5500?
Employers who sponsor the following types of benefit plans are generally required to file Form 5500.
- Retirement plans, such as 401(k), pension, and profit-sharing plans
- Welfare benefit plans, including health, dental, life insurance, and disability plans, among others.
- Direct Filing Entities (DFE), such as master trust and group insurance arrangements
There are some exceptions, such as small plans with fewer than 100 participants or certain types of government or church plans. Please contact us about your plan’s filing requirements to be sure you are in compliance.
Types of Form 5500
There are three primary versions of Form 5500 filings, each designed to accommodate specific types of employee benefit plans. The appropriate form to be filed depends on the size, nature, and specific details of the employee benefit plan being reported.
They include:
- Form 5500 – Annual Return/Report of Employee Benefit Plan: This is the standard version and is typically filed by larger plans with 100 or more participants. It is applicable to both retirement and welfare benefit plans.
- Form 5500-SF – Short Form Annual Return/Report of Small Employee Benefit Plan: This is a simplified version designed for small plans with fewer than 100 participants. It can be filed by both retirement and welfare benefit plans that meet certain eligibility reporting requirements, such as having all assets invested in secure, easy-to-value investments.
- Form 5500-EZ – Annual Return of a One-Participant Retirement Plan or A Foreign Plan: This is specifically for one-participant retirement plans or foreign plans that are not subject to the filing requirements of Title I of ERISA. One-participant plans include those covering only the business owner (and their spouse) or only one or more partners (and their spouses) in a partnership. This form is filed with the IRS instead of the Department of Labor and can be filed through the EFAST2 system.
It is important to note that each of these forms may require the completion and submission of additional schedules depending on the plan’s characteristics and the type of benefits provided. Properly identifying the correct form and accompanying schedules is crucial for ensuring compliance and avoiding potential penalties.
Our Services
Our Form 5500 Preparation Services include:
- Plan Data Collection: Our team will work closely with you to gather all necessary information and documentation required for the preparation of your document, including plan financial statements, participant data, and any relevant plan document amendments
- Preparation: Once all the required information is collected, our experts will meticulously prepare your 5500, ensuring compliance with all applicable regulations. We carefully review your plan’s data to identify any discrepancies or errors and make any necessary adjustments to maintain accuracy
- Review: Before filing, we will provide you with a draft version of your completed form for your review. This gives you the opportunity to confirm the accuracy of all information and address any concerns or questions you may have
- Electronic Filing (EFAST2): Once we receive your final approval, we will provide a link where the return can be signed electronically through the EFAST2 system, ensuring that your submission is both timely and secure
- Recordkeeping & Support: After your Form 5500 has been filed, we will provide you with a copy of the filed form for your records. Additionally, our team is available to assist you with any questions or concerns that may arise during the filing process or throughout the year
- Summary Annual Report (SAR): Once the return is filed, we generate the SAR for distribution to plan participants
Form 5500 Details
The Main Form section contains general information about the plan, including plan name, employer identification number (EIN), plan number, and the plan year.
Depending on the type and complexity of the plan, additional schedules may be required to provide more detailed information. Common schedules and attachments include:
- Schedule A: Insurance information
- Schedule C: Service provider information and fees
- Schedule D: Direct filing entities (DFE) and participating plans
- Schedule H: Financial information for large plans (generally with 100 or more participants)
- Schedule I: Financial information for small plans (generally with fewer than 100 participants)
- Schedule R: Retirement plan information, including distributions and funding
- Schedule MB or SB: Defined Benefit Plan Actuarial Information
- Independent qualified public accountant (IQPA): audited financial statements
Filing Deadlines & Extensions
Form 5500 must be filed electronically using the EFAST2 system within seven months after the end of the plan year. For example, if the plan year ends on December 31, the filing deadline is July 31 of the following year.
Extensions can be requested by filing Form 5558 with the IRS before the original filing deadline. This grants an additional two and a half months to file.
Failure to file Form 5500 or to file it accurately and on time can result in significant penalties from both the DOL and the IRS. Therefore, it is essential for plan sponsors to be diligent in their filing process and to seek professional assistance if needed.
To avoid penalties, it is crucial to file Form5500 on time, accurately, and with complete information. The penalties can include:
- DOL Failure to file a complete and accurate report: $2,400 per day
- IRS Late filing penalty: $250 a day up to a maximum of $150,000 per plan year.
If you find yourself in a situation where you have neglected or failed to file in the past, the U.S. Department of Labor (DOL) offers a voluntary initiative called the Delinquent Filer Voluntary Compliance (DFVC).
This is designed to encourage plan administrators to correct late or missing filings. The program offers reduced penalties for plan administrators who voluntarily submit overdue filings before being notified by the DOL about any delinquency.
Note however, the program is not available to plan administrators who have already been notified by the DOL about delinquent filings or are under investigation for other violations related to the plan, unless the DOL specifically says the plan still qualifies for the DFVC program.
Why Choose Us?
With offices from coast to coast, 5500Tax Group’s exclusive focus is on employee benefit tax compliance issues and regulatory changes. As highly qualified CPAs in good standing with decades of experience, our team of experts is well-versed in the latest regulatory reporting requirements and is dedicated to providing you with comprehensive and accurate Form 5500 preparation.
Our commitment to you is accuracy, timeliness, and customer satisfaction which ensures that your filing experience is as seamless as possible. Click here to learn more.
Contact us today to learn more about how we can assist you with your Form 5500 needs!
