Plan sponsors must generally file the Form 5500 return on the last day of the seventh month after their plan year ends.
The Department of Labor, Internal Revenue Service, and the Pension Benefit Guaranty Corporation jointly developed the Form 5500 Series so employee benefit plans could utilize the 5500 forms to satisfy annual reporting requirements under ERISA and the Internal Revenue Code. The Form 5500 Series is part of ERISA’s overall reporting and disclosure framework, which is intended to assure that employee benefit plans are operated and managed in accordance with certain prescribed standards and that participants and beneficiaries, as well as regulators, are provided or have access to sufficient information to protect the rights and benefits of participants and beneficiaries under employee benefit plans.
Most employers with retirement plans are used to the concept of filing Form 5500s for those benefits. However, an alarming number of employers neglect to file required Form 5500s for their welfare benefit plans. This is often because they either are completely unaware of the requirements, they don’t believe the requirements apply to them or they believe someone else (such as an insurance carrier or insurance agent) is filing on their behalf.
The Form 5500 filing requirement for Welfare Benefit Plans arises from ERISA. Therefore groups that are exempt from ERISA are not required to file. This includes governments (both state and local) and churches. Despite a common misconception, non-church charitable institutions are subject to ERISA and must file if not otherwise exempted. The other important exception to the Form 5500 filing requirements is for small plans. Plans with less than 100 participants as of the first day of the applicable Plan Year do not have to file. For example, a Plan with 80 participants on January 1, 2011 that grows to 150 participants on January 15, 2011 (and stays the same for the remainder of the calendar year) is not required to file for 2011 (on or before July 31, 2012). When counting Participants, employers should focus on the number of participating employees as opposed to total covered lives.
Unfortunately for employers who are subject to the Form 5500 filing requirements that fail to meet their obligations are subject to penalties from both IRS and DOL; so it’s very important to identify this mistake before they do. The IRS penalty for late filing of a 5500-series return is $25 per day, up to a maximum of $15,000. The DOL penalty for late filing can run up to $1,100 per day, with no maximum.
Admin America’s Form 5500 Preparation Services for Welfare Benefit Plans Include:
- Signature ready, machine-readable Form 5500 complete with all required schedules guaranteed for delivery to customer via express overnight mail within five business days.
- Substantial discounts for preparation of additional Form 5500s for the same employer for multiple plans in the same year or for the same plan in subsequent plan years.
- Full time on-staff attorney to oversee the completion of each Form 5500.
- Free assistance with filing Form 5584 – Request for Extension for Time to File, if necessary.
What is the purpose of Form 5500?
It is the required annual reporting for certain pension and welfare benefit plans and contains information about a plan’s financial conditions, investments and operations. The form is co-sponsored by the DOL, IRS, and Pension Benefits Guarantee Corporation.
When must the Form 5500 and applicable schedules be filed with the Department of Labor (DOL)?
Generally, the form 5500 and applicable schedules must be filed by the last day of the seventh month following the close of the plan year. For calendar year plans, this date is July 31.
NOTE: If the filing deadline falls on a Saturday, Sunday or a federal holiday, the due date is the following business day.
Are there penalties for failure to file a return with the DOL?
The DOL and IRS may impose penalties or fines if the plan sponsor fails, or refuses, to file a complete return or if the form is rejected for insufficient information. Additional penalties may be incurred for willful violations, which include making false statements. Filings will be rejected by the DOL if required questions are left unanswered.
Where do I file the signed Form 5500 and applicable schedules?
The DOL requires that all Form 5500 annual returns be filed electronically using their ERISA Filing Acceptance System (EFAST2) program. The agency will no longer accept paper filings. This change to an electronic system is intended to create a more streamlined, cost-effective, and efficient process for filing the Form 5500.
NOTE: The electronic filing and signing process does not eliminate the need for the plan administrator to keep a copy of Form 5500, including schedules and attachments, with all required ink signatures on file as part of the plan’s records. This change in filing requirement only means that the plan administrator is signing their filing twice, once for the government agencies and then again in ink to be kept in the plan’s records; the filing is not sent via traditional mailing services, but electronically.
Who do I contact with questions or to learn more about the Form 5500 filing?
For details about electronic Form 5500 filing, visit http://www.dol.gov/ebsa/5500main.html.
If you have questions, please contact us at 770-992-5959 / 800-366-2961, Monday through Friday between 8:30 a.m. and 5:00 p.m. ET, or email us at firstname.lastname@example.org. We appreciate the opportunity to work with you.