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What Employers Need to Know About

Filing Form 5500

Presented by:Tabatha George

Phone: (504) 529-3845Email: tgeorge@fisherphillips.com

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AGENDA

• What is the Form 5500?

• Who must file?

• When is it due?

• What happens if you mess up?

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What is the Form 5500?

• Annual Return/Report of employee benefit plan (generally pension & welfare)

• Used to satisfy the annual reporting requirements for the DOL, IRS & PBGC

• Primary source of information reported to the government about employee benefit plans

• Used for enforcement, research & disclosure

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What types of information must be provided?

• Name, address and EIN of plan sponsor

• Name address and EIN of plan administrator

• Basic plan info (plan name/number, participant counts, plan features, funding and benefit arrangement, effective date, etc.)

• Actuarial info (DB plans and certain DC plans)

• Participating employer info

• Financial info

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What does the Form 5500 look like?• Consists of a main body and various schedules

• Which schedules a plan must include with its Form 5500 filing will depend on several factors (size, funding method, etc.)

➢ Schedule A (Insurance Information)

➢ Schedule C (Service Provider Information)

➢ Schedule D (DFE/Participating Plan Information)

➢ Schedule G (Financial Transactions)

➢ Schedule H (Large Plan Financial Information) & Accountant's Opinion

➢ Schedule I (Small Plan Financial Information)

➢ Schedule MB (Multiemployer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information)

➢ Schedule R (Retirement Plan Information)

➢ Schedule SB (Single-Employer Defined Benefit Plan Actuarial Information)

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Other Filing Requirements

• Some pension plans’ books and records must be audited by an independent qualified public accountant (IQPA)

• Copy of the auditor’s audit/opinion must be attached to the Form 5500

• Separately, must attach the Schedule of Assets Held at Year-End to the e-filing

• Waived for small plans that satisfy additional disclosure requirements (and, in some cases, an increased fidelity bond)

• Form M-1 compliance information must be included for MEWAs

• Form 5500 must be filed electronically through the DOL’s EFAST2 e-filing site

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Who must file?

• ERISA imposes the Form 5500 reporting obligation on the Plan Administrator

• Plans that must file include:• Large Pension Plans

• Small Pension Plans (less than 100 participants)

• Large Welfare Plans

• Small Funded Welfare Plans (less than 100 participants)

• Plans subject to the Form M-1 filing requirement

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Who doesn’t have to file?

• Plans not subject to ERISA• Governmental Plans• Church Plans (unless elects coverage under Code §410(d))• Non-ERISA benefits offered through a cafeteria plan• Some 403(b) plans

• SIMPLE IRAs

• SEPs and SARSEPs that satisfy an alternative compliance method

• Small Welfare Plans (less than 100 participants) that are unfunded, fully insured or a combination of the two

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What about voluntary benefits?

• ERISA provides a safe harbor exemption for voluntary benefit plans that meet certain criteria• Voluntary benefit plans do not have to file a Form 5500

• The DOL will consider a plan exempt under ERISA’s voluntary plan safe harbor only if the plan:

1. Is completely voluntary;2. Does not allow employer contributions;3. Does not allow the employer to endorse the plan; and4. Does not allow the employer to receive consideration for

collecting and remitting premiums (other than reasonable compensation)

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What about voluntary benefits?

• Voluntary benefits cannot be “established or maintained by the employer”• For example, if the employer withholds premiums on a pre-tax basis under its

cafeteria plan, the benefit will be subject to ERISA and Form 5500 filing

• The requirement that voluntary benefits not be endorsed by the employer is the most common pitfall• Conduct that may constitute “endorsement” include:

• Recommending the program to employees

• Negotiating the rates, terms or design of the program

• Distributing information regarding the voluntary program with other employer-offered ERISA benefits (e.g., including the voluntary program in the employee handbook)

• Assisting employees with claim and disputes

• Insurance contract is issued in the employer’s name

• Insurer offers premiums discounts to employees that are not offered to non-employees

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Form 5500-SF (Short Form)

• Small plans (< 100 participants at beginning of plan year) may file Form 5500-SF if certain other eligibility requirements are met:• Exempt from independent auditing requirement;

• 100% of the plan’s assets are invested in certain secure investments with a readily determinable fair value;

• Holds no employer securities;

• Not a multiemployer plan; and

• Not required to file a Form M-1 (i.e., not a MEWA or ECE)

• Two (2) page form that contains financial information and compliance questions• Aimed at reducing filing burdens for small plans

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Form 5500-EZ Annual Return

• Used by one-participant plans with assets at the end of the plan year which are at least $250,000 (also for final filings)

• Used by retirement plans maintained outside the U.S. primarily for the benefit of nonresident aliens• Required if employer maintaining the plan is:

1) a domestic employer or

2) a foreign employer with income derived from sources within the United States (including foreign subsidiaries of domestic employers) if contributions to the plan are deducted on its U.S. income tax return

• The Form 5500-EZ is a paper-only filing with the IRS. Alternative is to prepare a Form 5500-SF (not a 5500) and file electronically under EFAST2.

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How many Form 5500s are required?

• One Form 5500 for each plan maintained by a single employer• Many controlled group plans are permitted to file

as single employer plans

• Multiemployer plans file a single form 5500

• Multiple Employer Plans (Including MEWAs) generally may file a single Form 5500

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How do Wrap Plans change things?

• Wrap Plans can simplify 5500 filing

• Multiple plans can be combined into one Wrap Plan document• Alleviates the need to file a separate Form 5500 for each benefit• Assigns one plan number• Assigns one plan name

• Newly wrapped plans that have filing history must indicate they no longer exist• Filing prior to Wrap Plan implementation must indicate final filing• Wrap Plan implementation cannot be used to resolve delinquent

filings

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When is Form 5500 due?

• Generally, 7 months after the end of the plan year (e.g., for calendar-year plans, the deadline is July 31 of the following plan year)

• Extensions are available for a variety of reasons:• Filing Form 5558 on or before the regular Form 5500 due date

• Extends due date to 2-1/2 months beyond the regular deadline (i.e., Oct. 15 for CY plans)

• Extension is automatic (DOL/IRS approval not required)

• Filed in paper form with the IRS, not the DOL

• Automatic extension to the due date of the employer’s federal income tax return if: 1) the plan year and the employer’s tax year are the same;

2) the employer’s federal income tax return extension was granted to a date that is later than the normal due date for the Form 5500; and

3) a copy of the application for the employer’s federal income tax extension is maintained with the filer’s records

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When is Form 5500 due?

• Other extensions:• For a short plan year (less than 12 months) – Form 5500 and

applicable Schedules generally must be filed by the last day of the 7th month after the short plan year ends

• For natural disasters and other events (e.g., California wildfires, Hurricanes Harvey, Irma, and Maria)

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What if you mess up?

• Under ERISA, penalties can be imposed by the DOL for any refusal or failure to file a required Form 5500

• Penalties may be assessed not just for late or unfiled Form 5500s, but also for incomplete or otherwise deficient Form 5500s

• A Form 5500 that has been rejected by the DOL for failure to provide material information will be treated as not having been filed

• Criminal penalties are possible under ERISA §501 for willful violations

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What if you mess up?

• DOL assesses a per-day civil penalty against the plan administrator starting from the date of the administrator's failure or refusal to file a complete Form 5500• For penalties assessed after January 2, 2018, the maximum penalty is $2,140/day

• Applies to each Form 5500 that is not filed as required

• Cannot be treated as a plan expense

• $25/day fee (up to $15,000) assessed by the IRS for not filing returns for certain plans of deferred compensation, trusts and annuities, and bond purchase plans by the due date(s)

• $1,000 penalty for each failure to file an actuarial statement (Schedule MB (Form 5500) or Schedule SB (Form 5500))

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What if you mess up?

• Your Form 5500 filing can be amended to correct some deficiencies• Can submit an amended filing at any time after initial Form 5500 has been

submitted to correct minor issues.

• DOL Delinquent Filer Voluntary Compliance (DFVC) Program • The DFVC Program provides reduced civil penalties to plan administrators

that have failed to file Form 5500s or have filed them late• Under the program, plan administrators may correct late or unfiled Form

5500s by submitting a completed Form 5500 for the plan year(s) in question and paying penalty amounts specified under the DFVC Program• Penalty amount generally depends on the size of the plan and the number of days

the Form 5500 is late

• Available only to plans that have not received notice of the issue from the DOL

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Final QuestionsEmail: ubamember@fisherphillips.com

Presented by:Tabatha George

Phone: (504) 529-3845Email: tgeorge@fisherphillips.com

HRCI – ???

SHRM – ???

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Thank You

Presented by:Tabatha George

Phone: (504) 529-3845Email: tgeorge@fisherphillips.com