Form 5500…Changes Are Fast Approaching. Be Prepared. Presented by Patricia A. Stahm, QKA CBIZ Actuarial & Benefit Consultants

What Will We Cover Today? Which plans need to file Form 5500? What schedules are included with the filing? How have the schedules changed from last year? Which plans can file new Form 5500-SF? What is the new electronic filing process?

Which Plans Need to File Form 5500? Pension benefit plans covered by ERISA: –401(k), profit sharing, defined benefit, money purchase, stock bonus, and ESOPs –403(b) plan subject to ERISA requirements –SIMPLE 401(k) plans

Which Plans Need to File Form 5500? Welfare benefit plans covered by ERISA: –Plans with more than 100 covered employees, regardless of how benefits are paid –Plans that pay benefits from a trust, regardless of how many employees are covered

Which Plans Do Not Need to File Form 5500? Pension benefit plans such as: –Unfunded excess benefit plans –403(b) plans not covered by ERISA –SIMPLE IRAs –Non-electing church plans –IRAs –Governmental plans

Which Plans Do Not Need to File Form 5500? Welfare benefit plans: –Covering less than 100 employees that are: Unfunded (benefits are paid from employer assets) Fully insured (benefits are paid through insurance contracts or policies with premiums paid by either employer, employees or combination) Combination of unfunded and fully insured

Delinquent Filer Voluntary Compliance Program If the Department of Labor finds you first: –Department of Labor penalties - $30,000 per year –Internal Revenue Service penalties - $25,000 per year

Delinquent Filer Voluntary Compliance Program If you voluntarily file first: –$750 per year for small plan (capped at $1,500) –$2,000 per year for large plan (capped at $4,000)

Delinquent Filer Voluntary Compliance Program How do you file? –File full 5500 filing electronically –Send copy of 5500 to Charlotte, NC with penalty payment or make payment electronically on DOL website

What Schedules Are Included With the Filing? Determined by plan category –Small plan – less than 100 participants on the first day of the plan year –Large plan – 100 or more participants on the first day of the plan year – rule

“All” Plan Schedules Form 5500 – the “transmittal letter” Schedule A – plans with insurance Schedule SB/MB – defined benefit plans Schedule D – plans participating in DFE-type investments (DFE stands for Direct Filing Entity)

“All” Plan Schedules Schedule R – plans with required funding and/or distribution activity and/or adoption of amendments affecting defined benefit pension values and/or ESOP Schedule SSA – reports participants with deferred vested benefits to the Social Security Administration

Small Plan Schedules Schedule I – limited reporting of financial information and plan activity –Attachment for schedule of delinquent contributions

Large Plan Schedules Schedule C – used to report fees paid to service providers and termination of accountant and/or actuary

Large Plan Schedules Schedule H – detailed reporting of financial information and plan activity –Attachment for delinquent contributions –Attachment for assets held for investment purposes –Attachment for assets held and disposed of within year –Attachment for reportable transactions Accountant’s Report – results of independent audit of plan activity

How Have the Schedules Changed? Schedule C – significant expansion of disclosure of fees focusing on indirect compensation received by service providers Schedule E – eliminated entirely; limited questions moved to Schedule R

How Have the Schedules Changed? Schedule I – new requirements for reporting late deposit of contributions and blackout periods; new categories for fees paid by plan Schedule H – same additions as listed for Schedule I; mutual fund dividend income now reported separately

How Have the Schedules Changed? Schedule R – addition of ESOP questions; addition of questions for multiemployer defined benefit plans Schedule SSA - no longer filed with the 5500; awaiting new Form 8955-SSA to file directly with IRS –Not yet available so may have to file an extension just for Form 8955-SSA

Changes for 403(b) Plans If subject to ERISA, only limited reporting was previously required Effective with plan years beginning in 2009, full reporting is required, same as all other retirement plans Includes audit requirement for large 403(b) plans

What’s the New Form 5500-SF? To be eligible: –Less than 100 participants on first day of plan year –Exempt from audit requirement (without enhanced bond) –100% “eligible plan assets” –No employer securities –Not a multiemployer plan

What Are “Eligible Plan Assets”? 100% invested in certain secure, east to value assets such as: –Mutual funds –Investment contracts with insurance companies and banks valued at least annually –Publicly traded securities held by a registered broker dealer –Cash and cash equivalents –Plan loans to participants

What’s the Electronic Filing Process? ERISA Filing Acceptance System aka EFAST2 –DOL website –Third party vendor software used to generate 5500 and schedules (Relius, Datair, ACS, etc.) Electronically signed 5500 submitted by software to EFAST2 for processing

What’s the Electronic Filing Process? Required for plan years beginning in 2009 Also required for prior years’ returns that are being amended or filed under Delinquent Filer Voluntary Compliance Program

What’s the Electronic Filing Process? Steps for registering –Obtain PIN and user ID from DOL website ( –Must have accessible address to complete process

What’s the Electronic Filing Process? Possible user types –Filing author –Filing signer –Schedule author –Transmitter

What’s the Electronic Filing Process? Notes regarding PIN –PIN is not to be shared with anyone else (such as a TPA or recordkeeper) –Same PIN can be used to sign multiple returns, including those of different companies –Keep PIN in safe place – if lost, can only be replaced by calling the DOL

What’s the Electronic Filing Process? Schedules/attachments submitted to DOL in pdf format: –Schedule SB/MB (includes actuaries wet signature) –Attachments to Schedules SB/MB –Audit report (includes wet signature and letterhead) –Attachments to Schedule I or Schedule H

What’s the Electronic Filing Process? When the filing is ready –Typically notified by that 5500 is ready to be signed –Signer enters PIN, user ID and name –Filing is submitted to DOL for processing either by signer or by vendor

What’s the Electronic Filing Process? Filing status messages – the bad ones: –Unprocessable submission – can’t open files –Processable submission – opened but not determined if acceptable –Processing – reading and determining if acceptable –Filing unprocessable – could not be read These filings are not received!!

What’s the Electronic Filing Process? Filing status messages – the good ones: –Filing stopped – read but critical information is missing (further action required) –Filing error – found critical errors (further action required) –Filing received – no errors These filings are received and can only be changed by amending the filing!!

What’s the Electronic Filing Process? Plan sponsor must still keep a signed paper copy of the filing with the plan records Summary Annual Report must still be distributed to participants

What’s the Electronic Filing Process? When to file –First deadline is 7 months after year end –May be extended: File Form 5558 prior to 7 month deadline – gain 2 ½ additional months to file Use sponsor’s tax return extension – gain 1 month to 2 ½ months depending on entity type

What’s the Electronic Filing Process? Form 5558 still filed via paper copy; not included with Form 5500 filing Deadline is midnight in the time zone of the plan administrator (based on address on Form 5500) If problems, print error messages, include as an attachment and re-submit filing –May be treated by DOL as timely based on facts and circumstances

What’s the Electronic Filing Process? Some exceptions to filing deadline: –If deadline falls on Saturday, Sunday or federal holiday, filing may be submitted on next business day –DOL provides additional extensions based on extenuating circumstances such as natural disasters

What’s the Electronic Filing Process? Filings will be available for public display within 1 day (DOL expectation!) Amended filings previously only required the schedule or attachment being amended Now must submit entire filing so that public display is complete

Questions? Pattie Stahm CBIZ Actuarial & Benefit Consultants (602) ext Oscar Diaz CBIZ Benefits and Insurance Services (520)