2016 FORM 5500 CHANGES
The final versions of the 2016 Form 5500 forms, schedules and instructions have been posted! There were just a few changes to note compared to the prior year:
- A penalty of up to $2,063 a day for each day a plan administrator fails or refuses to file a complete report. This is an increase from the previous $1,100 a day penalty and applicable to civil penalties assessed after August 1, 2016, whose associated violation(s) occurred after November 2, 2015, the date of enactment of the Inflation Adjustment Act. Going forward, the DOL is expected to adjust ERISA Title I penalty amounts annually for inflation no later than January 15th of each year.
IRS Compliance Questions
The IRS has decided not to require plan sponsors to complete questions on Schedules H and I, Lines 4o, and 6a through 6d, for the 2016 plan year and plan sponsors should skip these questions when completing the form. The IRS has decided not to require plan sponsors to complete questions on Schedules R, Part VII – IRS Compliance Questions for 2016 plan year and plan sponsors should skip these questions when completing the form.
- Line 4o has been updated for DB and Money Purchase Plans: Were any distributions made during the plan year to an employee who attained age 62 and had not separated from service?
- Line 4p has been removed.
- Line 5c has been updated to add a new question to the existing question that asks if a plan is a defined benefit plan, is it covered by the PBGC insurance program. The new question asks filers that checked the box “Yes,” to enter the My PAA generated confirmation number from the PBGC premium filing for this plan year.
- Compliance questions 20a – 22b should not be completed, per the IRS.
- Line 5i – for the actuarial cost method used as the basis for this plan year’s funding standard account computations, “Reorganization” has been removed as a cost method option.
- The instructions for Cooperative and Small Employer Charity (CSEC) plans, reported in Line 27, Code 1, have been updated to reflect guidance on certain issues relating to the application of the Cooperative and Small Employer Charity Pension Flexibility Act, Pub. L. No. 113-97 (CSEC Act)).
- Line 10j has been removed.
- Lines 15a – 19, the compliance questions, should not be completed, per the IRS.
Form 5500-EZ Late Filing Penalty Relief Program Is Now Permanent
- Filed on paper and on the correct plan year form.
- Have the following manually written in red at the top of each paper return -“Delinquent Return Submitted under Rev. Proc, 2015-32, Eligible for Penalty Relief.”
- All delinquent returns for this plan must be sent in together with one completed Form 14704, “Transmittal Schedule – Form 5500-EZ Delinquent Filer Penalty Relief Program” attached to the oldest plan year return.
- Checks should be payable to the United States Treasury with the filer’s EIN and plan number.
- Mail the items listed above with payment to:
- Internal Revenue Service, 1973 North Rulon White Blvd., Ogden, UT 84404-0020.
2014 Form 5500 Changes
Did you know that the 2014 Form 5500 and schedules already exist? Though we cannot view them online yet, they are provided to Form 5500 software developers in June of each year before they are released to the public each January. Here are a few highlights to note for 2014 filings:
- Form M-1 Compliance information will appear as three new questions on the Form 5500; this will hopefully eliminate the currently required health and welfare plan attachment for plans that are not Multiple Employer Welfare Arrangements (MEWAs).
- When the Multiple-Employer box is checked, there will be an attachment required that reports the name, EIN, and estimate of each contributing employer’s percentage of total contributions made for the plan year.
- A participant count question is added (Line 6a(1)) which requests the number of “Active participants at the beginning of the plan year.” Note the Active participant count at the end of the plan year will be labeled as Line 6a(2).
- Schedule H instructions will have a definition for “Registered Investment Company.”
- Form 5500-SF – a new check box is added to indicate whether the plan is a foreign plan.
- Schedule SB – Line 3 is modified to report the funding target separately for each type of participant (active, retired, and terminated vested).
- Schedule SB, Line 11b is split into two parts: (1) providing the calculation based on the prior year’s effective interest rate and (2) providing the calculation based on the prior year’s actual return.
- Schedule SB, Line 15 instructions are expanded to address situations in which AFTAP was not certified for the plan year.
- Schedule MB, Line 4f is added to require plans in critical status to provide information about the plan year in which the plan is projected to emerge from critical status or, if the rehabilitation plan is based on forestalling possible insolvency, enter the plan year when insolvency is expected. (10/6/2014)
Recent updates and announcements regarding Form 5500’s:
- Effective January 1, 2014, IFILE will no longer keep Form 5500’s and 5500-SF’s that filing authors last updated more than a year ago and have not submitted to the Government.
- The DOL released a proposal to require a guide or summary that would accompany each covered service providers’ 408(b)(2) disclosures to improve participant and employer understanding. This proposal is now open for comment until June 9, 2014.
- Phyllis Borzi, head of DOL’s EBSA, described her agency’s new “Prohibited Person’s Project” pilot program. This program will track individuals in the service provider community with a history of misconduct so plan sponsors are aware of this. The hope is to eventually roll this program out nationally.
- Primary reasons a plan is selected to be audited by the DOL include: a participant complaint, a Form 5500 response, or hiring an accounting firm that performs less than 25 employee benefit plan audits per year. (March 2014)
New for 2013 Forms
- Title: “Form M-1 Compliance Information”
- Whether the plan was subject to the Form M-1 filing requirements during the plan year.
- If the plan was subject to Form M-1 filing requirements, state whether it is currently in compliance with Form M-1 filing requirements.
- If subject to the Form M-1 filing requirements, provide the Receipt of Confirmation Code for the 2013 Form M-1. If the plan was not required to file the 2013 Form M-1, enter the Receipt Confirmation Code for the most recent Form M-1 that was required to be filed.
DOL Focus on Audit Quality
Therefore, they are sending inquiry letters to a sample of plan sponsors and their respective auditing firms. A higher percentage of letters are being sent to the smaller auditing firms. Included with these letters is a questionnaire for each auditing firm to complete. It asks for various items and pieces of information in regards to the 2011 plan year including:
- A copy of the CPA’s work papers;
- The amount of employee benefit plan audit training they receive;
- A copy of their CPA license to practice; and
- Copies of their most recent peer reviews.
Fifty of these letter were sent out the week of November 4, 2013 with a 15 day turnaround requirement. The DOL will then evaluate the quality of audits for the plans targeted. Future letters will be sent out in stages. Since these letters are being sent to both plan sponsors and their auditors, the DOL hopes that when errors are found and communicated (both parties will receive this feedback), plan sponsors will ask themselves: ‘Why are we continuing to use an auditing firm that produces less accurate audits?” (12/17/2013)
Submitting Form 5500 Filing Shortly After Form 5558 is Sent
Form 5500 filers that submit their return before their extension Form 5558 has been processed by the IRS are likely to receive a CP 283 notice that assesses a late filing penalty.
Proposed changes to the penalty program would allow time for extensions to post before penalty notices are generated. However, until these changes are implemented, tax examiners and telephone assistors should abate these penalties as ‘service errors’ using the guidance below. Any penalties that have been erroneously assessed should be abated, regardless of the amount, because the penalties are due to Service Programming. They should use Reason Code (RC) 045 to signify an IRS error. You should receive an apology and receive ‘Letter 168C’ which states that the penalty has been removed due to a Service Error.
If you are an administrator or sponsor with multiple plans or clients that received a penalty notice in error, the IRS can abate up to five penalties over the phone. (Call:1-877-829-5500; Monday – Friday, 8:00 a.m. to 5:00 p.m. EST.) If you receive more than five penalty notices, then expect to be instructed to submit a request for abatement in writing. One letter can address multiple plans and sponsors. Abatement requests should be mailed or faxed to: EP Accounts at: Internal Revenue Service 1973 North Rulon White Blvd Attn: EP Accounts M/S 6552 Ogden, UT 84404; Fax 801-620-5670. (12/16/2013)
Concerns About 408(b)(2) Disclosures – One Year Later
Thousands of Form 8955-SSA Penalty Letters Sent in Error
Avoid Issues With Form 5558
Before heading off for your summer vacation, make sure your Form 5500 filings were submitted successfully or that a Form 5558 was completed and sent in for each plan filing.
What Has Changed?
The Form 5558 – Application for Extension of Time to File Form 5500, 8955-SSA and 5330 was revised effective August 2012. It now accommodates only one plan filing per form, rather than the prior version which accepted up to three plans and even earlier versions that accepted attachments with a full list of plans being extended. There is also a new box to check if you are extending a first time filing.
Reason Behind These Changes
It seems that when multiple plans were listed on, or attached to, the Form 5558, the logging in of all plans at the IRS was not consistently completed. Many plan sponsors received correspondence following the submission of their Form 5500 filings after the original due date saying their filing was submitted late. Even some who received confirmation letters that stated their filing was successfully extended, received “your filing was late” letters.
Play it Safe
There have been many issues where extended plans were rejected as not being extended so it is very important that you protect the filings you want to extend.
- Do not attach a list of filings to one Form 5558 in hopes they will all be logged in at the IRS as extended. The IRS is saying the entire Form 5558 will be rejected and sent back.
- Mail all extensions via certified mail, return receipt so if needed, you have a dated receipt and proof of delivery in response to an IRS letter.
- If you receive a confirmation back from the IRS that says your Form 5558(s) request for extensions have been approved – you may still receive a “your filing is late” letter so keep all back-up!!
The Form 5558 does not require a signature to extend Form 5500 or Form 8955-SSA. However, a signature is required to extend Form 5330. (06/28/2013)
New DOL Inquiry Letters
The Department of Labor’s Office of the Chief Accountant has started to send letters (on paper and email) asking plan sponsors of retirement plans whether they also have a health and welfare benefit plan. The purpose of the letter, which requires a response within 15 days, is to remind plan sponsors that certain employee welfare plans must file a Form 5500.
These letters are not just targeting large plan filers and they are not saying health and welfare plan filings are delinquent. However, if they were in fact missed, the plan sponsor can submit these late filings through the DOL’s Delinquent Filers Voluntary Compliance (DFVC) Program.
The letters focus on the 2010 and 2011 plan years. The DOL is expecting 100% response rate. They ask several questions that may lead to a reason why they are not finding a health and welfare Form 5500 filing submitted for a specific company, for example, if less than 100 employees benefited or if they were filed under a different EIN. There is also an option indicate a filing was required but not submitted timely. The letter then suggests that you look at the DFVC Program to submit the late filing(s) and get your plan in compliance. (06/28/2013)
2012 Form 5500-EZ Released!
The 2012 form 5500-EZ was released and posted on March 28, 2013. The correct year’s form must be used. Here is a link to the newly released form and instructions:
2012 Form 5500-EZ: http://www.irs.gov/pub/irs-pdf/f5500ez.pdf
DFVC Program Mailing Address
Though the DOL encourages electronic payment for plans being submitted under their DFVC Program, there is an option to pay the penalty by check. Payment cannot be paid from plan assets. See article below for online calculator link to accurately compute the amount due. The calculator also has a link to the electronic payment screens. If paying by check, the mailing address is:DFVCP P.O. Box 71361 Philadelphia, PA 19176-1361
Effective December 1, 2011, there is no private delivery address available. The check should be sent with pages 1 and 2 of each delinquent Form 5500 filing and EFAST2 confirmations along with a cover letter. Submitting a filing through the DFVC Program is a two step process. The completed filing must be submitted electronically via EFAST2 and then the payment (electronic or paper check) is the second step to follow, right after successful electronic submission. (2/28/2013)
EBSA Updates Delinquent Filer Correction (DFVC) Program
The EBSA issued a notice (January 28, 2013) which states their Filing Acceptance System (EFAST2) is now fully implemented for both timely and past due Form 5500 filings which means paper filings are a thing of the past. The notice reminds us that the DFVC Program was adopted by the DOL in 1995, amended in 2002, and approved under OMB Control #1210-0089, which currently is scheduled to expire on May 31, 2014. This notice does not change this expiration date – but we all hope it will be extended. This notice discusses all aspects of the DFVC Program and points out their late filing online tools including an online calculator to calculate a plan’s late fees. If you have been keeping up with it, there should be no surprises. The document is 26 pages, so if you have a quick question, the DFVC FAQ’s may provide a quicker route.
Here are a few items to note from the notice:
- Filings prior to 2009 may have required schedules that were eliminated or significantly revised (primarily Schedules B, SB, MB, E, P, R, T). For these cases, the old schedule must be attached to the most current plan year form. Refer to their Form Selection Tool.
- Filers required to file a Schedule C for a plan year prior to 2009, have the option of attaching a pdf of the correct year Schedule C, completed with blue or black ink in accordance with the correct year instructions, instead of filing the latest plan year Schedule C available.
- 403(b) plans for prior to 2009 plan years must use the latest Form 5500 available, but must complete only Part I and Part II, lines 1-4, and line 8 of the Form 5500 since full reporting requirements were not effective until their 2009 plan year.
- A separate submission to the DFVC Program (including a separate electronic payment for the applicable penalty amount) must be made for each plan. Online penalty payments cannot be supplemented later to add additional filings. Each delinquent filing requires its own online submission and applicable penalty calculation.
Delinquent Defined Benefit Plans Submissions
Delinquent Filings For Plan Years Beginning On Or After January 1, 2009, that are more than three plan years late must use the latest available plan year Form 5500 (or Form 5500-SF), and schedules. In the case of plans required to file a Schedule SB or Schedule MB for the delinquent plan year, filers must attach as a pdf image a correct year Schedule SB or MB, for the plan year for which the delinquent filing is being made. For Example: In February 2014, a plan administrator for a single employer defined benefit pension plan discovers that the plan did not file its 2009 Form 5500. The 2013 Form 5500 and schedules were made available for filing through EFAST2 on January 1, 2014. Because the 2009 plan year is more than three years earlier than the latest available plan year Form 5500 available for filing (2013), the plan administrator must use the current year (2013) Form 5500 and applicable schedules, except for a pdf image of the correct year Schedule SB, with its required attachments.
The IRS is expected to issue their own guidance to document their relief of delinquent Forms 5500, which in the past has stated they will accept filings submitted via the DOL’s DFVC Program. Let’s hope this stays the same. (1/30/2013)
The IRS has announced that it is eliminating proposed penalty notices:
- CP 213N, Proposed Penalty Notice for Late Filing of Form 5500, Annual Return/Report of Employee Benefit Plan
- CP 213I, Proposed Penalty Notice for Incomplete Filing of Form 5500
under the Form 5500 program in an effort to reduce processing costs, reduce notices and comply with notice and systems standards. Therefore, there will not be an early warning letter, so filers will only receive the CP 283, Penalty Charged on Your 5500 Return, if a Form 5500 is filed late or is incomplete.
Since these letters usually do not have an addressee’s name on them, they often get lost within a company or take a long time for them to end up with the correct person at the company so be prepared to take prompt action. (December 18, 2012)
2012 Form 5500 Series Forms Released
On December 4, 2012, the DOL officially released the 2012 Form 5500 series forms and instructions! However, the Form 5500-EZ and Form 8955-SSA have not been released yet. Here is a summary of the changes to be aware of:
- The Form 5500-SF signature line was moved from page 2 to page 1, so it is now similar to the Form 5500 format.
- Underneath the Form 5500 and Form 5500-SF signature line, a new “Paid Preparer’s name” line has been added. It is noted as “Optional,” similar to versions prior to 2009, but note that it is asking for the preparer’s name, address, and phone number, not just the firm’s name that they work for. There were concerns of providing this information in the past, since Form 5500 filings are posted on the internet and therefore, open to the public. Paid preparers are not typically set up to answer plan participant’s questions, which could result from a participant’s review of a filing. We recommend you discuss this internally to decide as a company whether you want to fill these lines in.
- Line 3a which reports the Plan Administrator’s name, address, phone number, and EIN is no longer required to be entered in full. Instead, there are two boxes – one to check if the plan administrator and plan sponsor’s names are the same and another to check if their address is the same.
Schedules H & I
- Schedules H & I have a new Line 6a (5500-SF – Line 14a) to provide the name and EIN of the plan’s trust. This information was previously provided on the Schedule P until this schedule was eliminated after the 2006 plan year. It is now back, and we encourage you to complete this so the trust EIN is noted by the IRS and will not be deleted from their records, as has happened for some. If the plan uses more than one trust account, the primary trust information should be entered here.
- Lines 4d and 4e – instructions (page 53) that have been clarified; and
- Multi-employer actuarial information reporting has been clarified for changes in adjustable benefits, and for amortization charges under the funding standard account statement.
- Line 11b, instructions (page 67), request additional detail for the prior year’s excess contributions to be added to the pre-funding balance; and
- Actuaries preparing the 2012 Schedule SB should reference IRS Notice 2012-61 for guidance regarding the Moving Ahead for Progress in the 21st Century Act. (December 17, 2012)
Revised Form 5558 Issued – August 2012
- Only one plan can be extended per form. Even though the form is still to be filed on paper, they are only allowing space to enter one plan name and plan number. Seems like they are working towards a more automated process by doing this, but they are not there yet. This is going to cause a paper explosion, especially for companies that have more than a few plans to extend.
- A new box was added to check if you are submitting the Form 5558 for a first-time filing. This will alert the IRS to not match the request to a plan that has already been filed and therefore, they need to create a new record.
- As communicated this past June 2012, but not documented on Form 5558 until now, a signature is not required to extend a Form 8955-SSA as was stated on the June 2011 version. A signature is still required to extend a Form 5330. (8/29/2012)
Form 8955-SSA Resolution on Who to Count for Lines 6a and 6b
The IRS has taken action to resolve a discrepancy regarding who to count on Lines 6a and 6b. The form states:
6a -Participants who separated with a deferred vested benefit required to be reported on this Form 8955-SSA. (This is considered prior year terms with an account balance and reported as a Code A)
6b – Participants who separated with a deferred vested benefit voluntarily reported on this Form 8955-SSA in the same year as the separation occurred. (This is for current reporting year terms with an account balance reported as a Code A)
Confusion occurred because the Form 8955-SSA instructions state to just report the number of participants that separated in the prior reporting year (6a) and in the current reporting year (6b). However, if submitting Form 8955-SSA electronically through the IRS’ FIRE system with the total of Lines 6a and 6b (reported on Line 7) not being equal to the number of participants reported on Line 9, an error message would be generated.
The good news is that the IRS has fixed this error on their FIRE system so we can now complete Lines 6a and 6b in the same way whether filing on paper or electronically! So do not count entry Codes B, C, and D on Lines 6a or 6b, even though you should report all separated participants that fit these code situations too. We look forward to this issue being stated more clearly in next year’s instructions! (7/12/2012)
IRS Approves Removal of Signature Requirement to Extend Form 8955-SSA
“Effective immediately (as of 6/21/2012), a Form 5558 can be used to extend both Form 5500 (or 5500-SF) and Form 8955-SSA for up to three plans without requiring a signature. The only time a signature is needed for Form 5558 is to extend Form 5330. The effort to remove the signature requirement by employee benefit organizations started shortly after the revised Form 5558 was issued on July 8, 2011. This recent approval makes sense because the Form 5500 extension was automatic since November 7, 2005, and the Form 8955-SSA used to be part of a Form 5500 filing (previously titled Schedule SSA). The IRS continues to have discretion to grant or deny an extension request for Form 5330, which will continue to require an explanation and signature. (6/22/2012)
Hold On Before You Prepare and Submit your Form 5558’s
The IRS has hinted that they are working on removing the signature requirement of the current Form 5558 to extend the Form 8955-SSA. There has been pressure from employee benefit professional groups towards the IRS to remove this recently added signature requirement since a signature is not required to extend the Form 5500 and the Schedule SSA (now renamed as Form 8955-SSA) used to be filed with the Form 5500. Though we all want to complete and submit Form 5558 sooner versus later, waiting a few more weeks will likely result in significant time savings. (6/9/12)
Form 5558 Now Requires Signature to Extend Form 8955-SSA
For 2011 calendar plan year filings, this will be the first time in many years where the Form 5558 requires a signature. The revised Form 5558 issued June 2011 now requires a signature to extend the Form 8955-SSA that is filed with the IRS. Last year any 2009 and 2010 Form 8955-SSA that was due on or before January 15, 2012, was granted an automatic extension, so we did not have to request an extension for this, until now.
Who can sign Form 5558? The answer to this is not perfectly clear. The instructions say “If you are filing Form 5558 for an extension to file Form 5330 and/or Form 8955-SSA, the form must be signed. The person who signs this form may be a plan administrator, employer, plan sponsor, or any other individual or authorized representative required to sign the Form 5330 and/or Form 8955-SSA.”
So it is not clear whether an attorney, qualified CPA, or Enrolled Retirement Plan Agent (ERPA) can sign. Some believe they can, while others are hoping for more clear guidance from the IRS. Before this new signature requirement, TPA’s were able to prepare and submit their client’s Form 5558’s en masse. Now opinions vary. Hopefully the IRS will come through to accommodate others to sign for their clients. In the meantime – consult with your legal counsel or just have the client as Plan Sponsor or Plan Administrator sign, for now. (4/24/2012)
Bloomberg BNA – Pension and Benefits Daily: Linda T. Fisher Speaks on NIPA Webcast About Schedule C, Form 8955-SSA Updates; March 28, 2012
See article posted on March 29, 2012 by Bloomberg BNA Pension and Benefits Daily regarding a webcast sponsored by the National Institute of Pension Administrators (NIPA) regarding DOL and IRS initiatives to ensure Form 5500 reporting is accurate. Since there have been numerous reporting and filing changes around the Form 5500, especially the Schedule C, and now with the new Form 8955-SSA – this webcast addressed several areas of confusion by Form 5500 preparers. Click on link for article: BNA Article Schd C
8955-SSA: IRS Clarifies Participant Statement Requirements
The IRS has addressed many of the Form 8955-SSA related questions with their Frequently Asked Questions posting.
A new Question 8 appeared on the 2009 and 2010 Form 8955-SSA regarding the old participant statement requirement. Here is their answer to this question – “May the plan administrator satisfy this requirement by using other notices such as benefit statements and distribution forms? Also, does this mean that the plan administrator must furnish a notice that includes all of the information on the Form 8955-SSA?”
ANSWER: A plan administrator may answer “yes” to question 8 if the required information was timely furnished to participants in other documentation such as benefit statements or distribution forms. A separate statement designed specifically to satisfy this requirement is not required.
A plan administrator may answer “yes” to Question 8 if the statements or other documentation issued to the participants include the following information:
- Name of the plan
- Name and address of the plan administrator
- Name of the participant
- Nature, amount, and form of the deferred vested benefit to which such participant is entitled.
We were all very happy to hear this response. So you need to confirm that the above listed items are included in your current term vested participant statements to fulfill this requirement.
The IRS updates these FAQ’s as needed, so check here on a regular basis. Though one of their recent FAQ’s says there is no delinquent filer program, and not to submit a payment with a late filing, they do address late filings with the following, but you are to wait for a penalty letter, rather than submit a payment with the late filing:
Late filing penalty (IRC section 6652(e))
This penalty applies to failure to file a required return or statement, including Form 8955-SSA, on the date and in the manner prescribed, with regard to any extension of time for filing, unless it is shown that such failure is due to reasonable cause. The penalty is $25 for each day during which the failure continues. (03/06/2012)
IRS Video Regarding Form 5558 Extension Preparation
The IRS posted a video that clarifies how many plans can be extended on a single Form 5558. They will no longer accept attachments to this Form 5500 extension request and will actually reject and send back any received with more than three plans listed. [Click here to view this video] Get ready to prepare multiple Form 5558’s to ensure all plans of a specific employer are listed on an extension request. (1/24/2012)
2011 Form 5500 Filings and Instructions are Posted!!
NOW REQUIRED TO SIGN – Form 5500 electronic signatures Each Form 5500 and Form 5500-SF that is filed with the DOL must be electronically signed by the plan administrator or by the preparer properly authorized to sign on behalf of the plan administrator. In the past, when preparers were not able to locate the plan administrator or obtain permission to sign on behalf of the plan administrator before the filing deadline, they would submit it without a signature, to avoid penalties. The DOL would process the form but issue a “filing stopped” status. The filing would then need to be amended with the proper electronic signature and re-filed with the DOL.
Effective January 1, 2012, the DOL will no longer permit this filing option. A Form 5500 filed without an electronic signature will not be processed by the DOL. It will receive a filing status of “unprocessable,” which means that the DOL will not consider the return to be filed. Accordingly, if the plan administrator does not obtain an electronic signature and file the form (as an original return) with the DOL prior to the deadline, the plan administrator will be subject to late filing penalties.
One-Participant Plans. An employer that sponsors a one-participant plan may file a Form 5500-EZ on paper with the IRS OR the Form 5500-SF electronically with the DOL. The IRS has announced that the Form 5500-SF will no longer be publicly disclosed on the DOL website once filed. This encourages more one-participant plans to file electronically and reduce additional processing costs for the IRS.
FOR PLAN YEARS PRIOR TO 2009 – MUST BE FILED ON 2011 FORMS NOW!! To submit a delinquent or amended Form 5500 return/report electronically through EFAST2 for plan years prior to 2009, you must submit the filing using current filing year Form 5500, schedules, and instructions except for the following exceptions:
- Schedule B, SB, or MB (Actuarial Information),
- Schedule C (optional – can use current or prior to 2009 version)
- Schedule E (ESOP Annual Information),
- Schedule P (Annual Return of Fiduciary of Employee Benefit Trust),
- Schedule R (Retirement Plan Information), and
- Schedule T (Qualified Pension Plan Coverage Information).
For example, if you are filing a delinquent 2007 Form 5500 return/report for a defined benefit pension plan, you must include the 2007 Schedule B, Schedule R and all required attachments for these schedules. Attach them as pdf images to the current filing year Form 5500, tagging them as “other attachments.”
ALERT! A new type of filing attachment has been added, for the manually signed page 1 when the service provider signs on behalf of the Plan Sponsor. Look for it in your 2011 software or on IFILE! (01/07/2012)
PBGC – Schedule H Posting
Form 5500 Schedule H instructions for reporting PBGC premium payments made from plan assets
On November 2, 2011, PBGC responded to an inquiry by the Pension Committee of the American Academy of Actuaries about instructions for reporting PBGC premium payments made from plan assets. For 2009 and 2010 plan years, filers may report that information on either Line 2(i)(4) (other administrative expenses) or Line 2l (transfers of assets). For 2011 plan years, filers will be required to report that information on Line 2(i)(4). PBGC’s response was prepared in coordination with the Department of Labor and the Internal Revenue Service.
This communication was delivered due to an error in the Form 5500 2009 and 2010 instructions that directed the preparer to report PBGC payments from the plan’s assets on the Transfer Out line (2l). Prior to this change in the instructions, the “Transfer In” and “Transfer Out” lines were only to be used when assets from other plans transferred in or this plan’s assets transferred out to another qualified plan. By issuing this announcement, the PBGC is saying that they do not want you to go back and amend the 2009 and/or 2010 Schedule H just because you followed the erroneous instructions. (11/4/2011)
Form 8955-SSA Update
The 2010 Form 8955-SSA was posted by the IRS on November 2, 2011! The accompanying instructions were posted today (11/3/2011)!
The release of the 2010 Form 8955-SSA before plans have filed the 2009 Form 8955-SSA should not result in additional work for preparers. A filer can use the 2009 form to report combined information for 2009 and 2010 plan years on a single 2009 form filing.
Note the following expected rules:
- A filer that has used the 2009 form to report both 2009 and 2010 data will not need to file again using the 2010 form.
- If the 2009 form has not been submitted by the date the 2010 form is made official, filers may still use the 2009 form to report combined 2009 and 2010 data.
- If only 2010 data is being reported, then the 2010 form should be used to report that data.
- Software vendors need to upload the 2010 form – so keep a look-out for notification from your Form 5500 software vendor for this.
The IRS recommends the use of the 2010 form as soon as it is available, however, 2010 plan year data will still be accepted if on the 2009 form. They understand the time it will take the software companies to get the form ready for you to use. (11/4/2011)
DRAFT 2010 Form 8955-SSA Posted by IRS
Here a link to the 2010 Form 8955-SSA draft that the IRS released October 2, 2011 and is taking comments before it is finalized.
This draft form states that if you included 2010 SSA term vested information on the 2009 form, it should not be reported again on the 2010 form. Since we don’t know when this 2010 form will become effective, we recommend proceeding as you originally planned in regards to the preparation of the 2009 form. Note you can use the lag year reporting method which would be to report 2009 term vesteds now (due date extended to January 17, 2012) on the 2009 form and 2010 term vesteds on the 2011 Form 8955-SSA.
If you are using the current year reporting method, then you would report 2009 terms on the 2009 form (since we didn’t have a way to report them last year) AND 2010 terms on the 2009 form (unless the 2010 form becomes available in enough time before the January 17, 2010 due date.) More to come on this as the IRS finalizes the 2010 version. (10/5/2011)
New Tool to Help Form 5500 Filers – the 5500 Version Selection Tool
With the change to an all-electronic filing system and changes to the Form 5500 as well, you may have questions about what to file for plan years prior to the current year or how to amend prior year filings. The Form 5500 Version Selection Tool will help you to determine which version of the Form 5500 and which schedules you should use. The Department of Labor has released a new tool to help Form 5500 Filers – the 5500 Version Selection Tool, available at: http://www.dol.gov/ebsa/5500selectorinstructions.html
This should serve as a great reference when you are preparing prior year filings. (September 19, 2011)
New Form 5558 posted!
(July 8, 2011) http://www.irs.gov/pub/irs-pdf/f5558.pdf
The IRS has finally issued its long awaited Form 5558 – Request for Extension to extend Form 5500, 5500-SF, 5500-EZ, Form 5330, and now includes an extension option for the new Form 8955-SSA.
Form 5558 entitles an ERISA plan to be submitted 2 ½ months after its regular due date. Note – this year the popular October 15th extended due date should be stated as October 17, 2011 since the 15th falls on a weekend.
As noted previously (see earlier update below), the new 2009 Form 8955-SSA has an automatic extension for the 2009 and 2010 plan years to January 17, 2012 (if the 2010 plan year ends before April 1 2011). So for a calendar plan year filing, there is no need to complete a Form 5558 to extend the Form 8955-SSA, since you cannot extend it past the already granted extension, for this year
You can still use the former Form 5558 extension for a few months, so no need to resubmit on this new version or wait for your software vendor to post the new form.
Note, to extend a Form 5500 series filing, a signature is not required, as has been true for the past few years, however, a signature is required to extend the Form 5330 and Form 8955-SSA.
The person who signs this form may be a plan administrator, employer, plan sponsor, or any other individual or authorized representative required to sign the Form 5330 and/or Form 8955-SSA.
2009 Form 8955-SSA Has Been Posted (June 18, 2011)
Plan administrators may use a separate 2009 Form 8955-SSA to report information for the 2010 plan year or combine the information for the 2009 and 2010 plan years on a single 2009 Form 8955-SSA.
Filing Date Extended for 2009 and 2010 Form 8955-SSA
The filing due date for the 2009 and 2010 Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits, will be extended in guidance to be released shortly. The modified due date is the later of (1) January 17, 2012 and (2) the due date that generally applies for filing the Form 8955-SSA for 2010. No Form 5558 extensions will be granted for the January 17, 2012 due date.
Form 8955-SSA replaces Schedule SSA of Form 5500 beginning with the 2009 plan year.
Plan administrators must file Form 8955-SSA with the IRS and not through the EFAST2 filing system. The general filing due date is the last day of the seventh month following the last day of the plan year, plus extensions.
See Form 8955-SSA Resources for forms, Frequently Asked Questions, published guidance and information for e-file providers.
Form 8955-SSA is to be submitted to:
Department of the Treasury Internal Revenue Service Center Ogden, UT 84201-0024
2010 Form 5500-EZ are posted!! (June 13, 2011 update)
2010 Form 5500-EZ – http://www.irs.gov/pub/irs-pdf/f5500ez.pdf
Instructions – http://www.irs.gov/pub/irs-pdf/i5500ez.pdf
See IRS guidance posting: http://content.govdelivery.com/bulletins/gd/USIRS-94eac
Updates: Four new plan feature code entry boxes were added and a new type of plan is described which is referred to as an “eligible combined plan” effective for plan years beginning after December 31, 2009. This new type of pension plan consists of both defined benefit and defined contribution features. Only employers that have at least 2 but not more than 500 eligible employees can offer this type of plan. Also, the last 4 digits of the mailing address zip code to the IRS have changed for submitting Form-EZ; the completed form should be sent to:
Department of the Treasury, Internal Revenue Service, OgdenUT 84201-0020
June 8, 2011 Update – The IRS verbally announced on June 7, 2011 at the ACOPA Advanced Actuarial Conference they will accept the 2009 Form 5500-EZ until the 2010 version has been released. This is a change from their earlier guidance which was to wait for the 2010 version. When comparing the 2009 5500-EZ against the 2010 draft, they appear the same. We anticipate instruction revisions but are not sure exactly what they will be. (6/8/2011)
IRS guidance this week is to use the 2008 Schedule SSA to submit 2009 and 2010 data regarding terminated participants with deferred vested benefits. The IRS recommends that filers wait for the 2009 release but will accept 2008 Schedule SSA’s on paper until the Form 8955-SSA is available. The 2008 Schedule SSA should be available from your approved software vendor.
More guidance about electronically filing Form 8955-SSA will become available after the IRS release. (6/8/2011)
Since the updated Form 5558 has not been released, the IRS is accepting the current Form 5558 and will accept it to extend the Form 8955-SSA also. Once released, the new Form 5558 will have a check box to extend the Form 5500 and another one to extend the Form 8955-SSA so all applicable boxes will need to be checked. Make sure you send the Form 5558 using a delivery service that provides proof of mailing since the IRS has sent notices of missing extensions to Plan Sponsors in error and will require this proof.
Submit Form 8955-SSA and Form 5558 to: Department of the Treasury, Internal Revenue Service, Ogden, UT 84201-0045. (6/8/2011)
2010 Form 5500-EZ Update!
Yes – we are still waiting for the 2010 Form 5500-EZ to be released and it is almost mid-June. At this point, we recommend preparing and submitting the extension – Form 5558 to move the due date from 8/1/11 to 10/17/11, even though an updated version of that is also “coming soon.” Let us know if we can assist with this! (6/7/2011)
Form 5558 and Form 8955-SSA Updates
Still no update to report regarding the release of the revised Form 5558 from the IRS. Guidance from the IRS directs us to delay submitting this extension request until the new version is released. The updated version is expected to include an added line and check box to request an extension for the (also delayed) Form 8955-SSA.
A draft of the Form 8955-SSA was released on May 24, 2010 and again on April 28, 2011, with no major differences between them, however, the instructions have not been released. Also, the IRS posted 18 FAQ’s regarding the Form 8955-SSA. They can be found by clicking this link: http://www.irs.gov/retirement/article/0,,id=238940,00.html (5/19/2011)
DOL EFAST2 Update (4/27/2011)
The DOL held a Webinar to provide an update around their EFAST2 system – including last year’s challenges and resulting improvements they implemented. (See “2009 Common Errors” Blog for presentation slides)
Most of the Webinar was a refresher around operational steps including:
- How to sign-up for credentials;
- Definitions of the various filing status’ and how to remedy;
- Various DOL publications and FAQ websites that can answer many questions;
- Volume challenges (calls and submissions) that were addressed shortly after they occurred;
- DOL Enforcement communications being sent for filing errors – 15 day and 45 day responses required;
- DFVC Program updates – can be completed all electronically; and
- Stressing not to wait until the last few dates before a due date to submit filings.
Items to note:
- Signers should use their same credentials going forward;
- Do not attach auditor’s report twice when opinion is part of report;
- Attach a blank page for Assets Held, if already included in Auditor’s Report;
- “Processing Stopped” message can occur if signature used was invalid;
- DOL is working on providing valid signature information to software vendors so error message is more meaningful;
- DOL “Paper “letters are being sent with expected 15 day turnarounds for many – not very realistic; and
- For DFVC Program filings – no attached statement required anymore.
DFVC Program – Change of Mailing Address
Effective March 29, 2011, the address for the Delinquent Filer Voluntary Compliance Program (DFVCP) lockbox was changed to:
DFVC DOL, PO Box 71361, Philadelphia, PA 19176-1361.
There is no overnight delivery address. Note that submissions to the DFVCP also can be done electronically. To do so, follow the DFVCP penalty calculator instructions for online payment.
Draft of 2010 Form 5500-EZ Posted
The IRS posted a draft of the 2010 plan year Form 5500-EZ on March 8. 2011 and requested comments, however, the corresponding instructions were not released. The draft form appears virtually the same as the 2009 version, but without the instructions, it is hard to know the exact changes. Final release is expected late April 2011. Therefore, the 2010 Form 5500-EZ cannot be completed and submitted until after the release. (3/22/2011)
Form 8955-SSA Update
Early March 2011, the IRS announced that the new Form 8955-SSA will be available “later this year” to report at least the 2009 plan year deferred vested balances by the due date of August 1, 2011. This date can be extended with the Form 5558 as has been the case with the Schedule SSA in the past. An updated Form 5558 is to be released which will include the Form 8955-SSA on it.
The IRS has not released the final version of the revised Schedule SSA, now called Form 8955-SSA. (See IRS Announcement: Form 8955-SSA (Rev. 4-2009).pdf )
Here is what we know at this time:
- Will be filed with the IRS for first time;
- 2009 data will likely be filed on a separate form from 2010 data;
- Timing of issuance of final form and instructions are not known; and
- Electronic filing option will be optional for the 2009 and 2010 plan years. (updated 3/22/2011)
On December 30, 2010, the Treasury Department and the IRS announced that the proposed rules which require an individual to pass a registered tax return preparer minimum competency examination are limited to preparers of individual income tax returns (Form 1040 series). The Form 5500 does not require certification or a PTIN. See link for additional forms that do not require a PTIN – Click here
Since the Form 5558 (Extension Request) and Form 8955-SSA are part of the Form 5500 series, a PTIN is not required for these forms also. (taken from a newly issued FAQ) (3/12/2011)
Note that Forms 945, 990, 5330, in addition to many others are not addressed in this announcement. (updated 12/31/2010)
PTIN refunds can be applied for by sending a signed, written explanation to:
IRS Tax Professional PTIN Processing Center
104 Brookeridge Drive – # 5000
Waterloo, IA 50702
Note: Refunds will only be approved for practitioners that prepare only Forms 5500, W-2, or 1099. Expect to wait about 6 weeks for refund. (3/22/2011)
DOL States: Recently Expanded Schedule C Improving Administrator Awareness
For large plans the Schedule C is required to report both direct and indirect compensation that the plan paid to service providers. The indirect compensation, that was newly required for the 2009 plan year, created much confusion, primarily due to the Schedule C instructions lacking clarity in addressing how to report indirect compensation.
The DOL is not sure how they will be using the indirect compensation information that was reported, so it is expected reporting will remain the same for the 2010 plan year. (updated 12/21/2010)
Automatic Extension Requests were not granted…
……except for large plans whose 2008 filing exceeded 100 pages that received an extension to October 18, 2010.
For the 2009 plan year filings, 675,000 filings were received, which was 20,000 short of the number of expected filings due. Amended filings exceeded the DOL’s expectations; likely due to the new and challenging electronic filing process. (updated 12/17/2010)