Forever Form 5500

Janice M. Wegesin, CPC, EA, President, form5500help.com

Scott Albert, Chief of the Division of Reporting Compliance,

DOL/EBSA

Janice M. Wegesin, CPC, EA President, form5500help.com

Janice M. Wegesin is the president of JMW

Consulting, Inc. in Petoskey, Michigan. She

specializes in compliance matters associated

with qualified retirement plans as well as

employee welfare benefit programs, with an

emphasis in reporting and disclosure. [See

www.form5500help.com.] With more than

35 years in the employee benefits field, her

resume includes consulting firm and large

accounting firm background.

Janice M. Wegesin, CPC, EA President, form5500help.com

Ms. Wegesin is an Enrolled Agent,

enrolled to practice before the Internal

Revenue Service, and has earned the

designation of Certified Pension

Consultant from the American Society

of Pension Professionals and Actuaries

(ASPPA). She is the author of the Form

5500 Preparer’s Manual (Aspen

Publishers).

Scott Albert, Chief of the Division of Reporting Compliance, DOL

Scott has been the Chief of the Division of

Reporting Compliance since 2000. He has

over 10 years of public accounting

experience managing the audits of

employee benefit plans, property and

casualty insurance companies, and health

care providers. His current responsibilities

include maintaining a multifaceted

reporting compliance program that utilizes

compliance assistance, voluntary

compliance, and traditional enforcement

strategies.

Scott Albert, Chief of the Division of Reporting Compliance, DOL

Scott also provides technical assistance

to filers and plan professionals, serves

as an ERISA-related accounting and

auditing expert within the EBSA, and

assists in the annual Form 5500

revisions. He is a certified public

accountant and a QPA, and holds a

BBA degree with a major in accounting

from the Bernard M. Baruch College,

CUNY.

Disclaimer

The information and opinions presented today

are those of the presenters and do not necessarily

represent the opinions or positions of NIPA or

the Department of Labor’s Employee Benefit

Security Administration (EBSA).

2013 Form Changes

• Form M-1 Compliance attachment

• Required for all welfare plan filings

• Must state:

• Whether the welfare plan is subject to the Form

M-1 filing requirements for the year

• If yes, whether the plan is currently in compliance

• Provide the Receipt Confirmation Code for the

2013 M-1 annual report.

7

Form M-1 Attachment

• Any plan that shows a plan number of 501 or greater at

line 1b of Form 5500 must include the attachment.

• Any Form 5500 filing for a retirement plan that shows a

welfare plan feature code at line 8b does not include the

attachment.

• The 2014 Form 5500 will include a specific line instead

of requiring an attachment.

8

Small Welfare Plan Filings

• Any small welfare plan that is required to file a Form

5500 (generally, because it is a funded plan):

• Must file Form 5500 if the plan is also required to

file Form M-1

• May file Form 5500-SF if otherwise eligible and no

Form M-1 is required. No Form M-1 attachment is

needed.

9

Business Code Changes

Removed:

• 441221 (Motorcycle Dealers)

• 441229 (All Other Motor Vehicle Dealers)

• 443111 (Household Appliance Stores)

• 443112 (Radio, Television, & Other Electronics Stores)

• 443120 (Computer & Software Stores)

• 443130 (Camera & Photographic Supplies Stores)

• 451220 (prerecorded Tape, Compact Disc, & Record Stores)

• 454311 (Heating Oil Dealers)

• 454312 (Liquefied Petroleum Gas (bottled gas) Dealers)

• 454319 (Other Fuel Dealers)

• 531114 (Cooperative Housing (including equity REITs)

• 722210 (Limited Service Eating Places)

Revised Business Codes

New: • 441228 - Motorcycle, ATV, and All Other Motor Vehicle Dealers

• 443141 - Household Appliance Stores

• 443142 - Electronics Stores (including Audio, Video, Computer, and Camera Stores)

• 454310 - Fuel Dealers (including Heating Oil and Liquefied Petroleum)

• 524130 - Reinsurance Carriers

• 722513 - Limited-Service Restaurants

• 722514 - Cafeterias and Buffets

• 722515 - Snack and Non-alcoholic Beverage Bars

Changed: • Women’s & Girls’ Cut & Sew Apparel Mfg - 315240 (was 315230)

• Other Cut & Sew Apparel Mfg - 315280 (was 315290)

• Full Service Restaurants - 722511 (was 722110)

2013 Form Changes

• Schedules H/I – line 5c; Form 5500-SF – line 6c.

• PBGC Coverage Question. A new Question 5c has

been added which asks filers of defined benefit plan

reports whether or not the plan is covered under the

PBGC insurance program.

• Plan Characteristic Code “1G” has been removed.

12

2013 Schedule SB

• Instructions have been updated to reflect MAP-21

(beginning at page 64)

• Line 11b instructions have been clarified for plans

where the valuation date for the prior plan year was

not the first day of the plan year (page 67).

13

Schedule C - The Big Question

• Does the potential indirect compensation shown on an ERISA §408(b)(2) disclosure result in that indirect compensation being “eligible”?

• Indirect compensation that is eligible qualifies for simplified reporting on Schedule C.

• This simplified reporting is referred to as the Alternative Reporting Option in the Schedule C instructions.

• Is there any indirect compensation that is not “eligible”?

14

Common Issues with Form 5500-EZ

• The PPA 2006 modified the term “partner” to include

an individual who owns more than two percent of an S

corporation.

• See IRC Section 1372(b); also PPA 2006 Section

1103(a)(2)(E).

• One-participant plans covering 100 or more

participants (e.g. large law firm with partner only plan)

must file Form 5500-EZ on paper

• No benefit plan audit 15

Common Question

• Who must sign the Form 5500?

• Under ERISA, the plan administrator

• Under IRC, either the plan administrator or

employer/plan sponsor must sign and date

• Exceptions:

• Joint employer-union board of trustees or

committee is the plan sponsor or plan

administrator, at least one employer representative

and one union representative must sign.

• DFE filings 16

Who Must Sign?

• For EFAST2 purposes, only the electronic signature of

the plan administrator is necessary to process the filing.

• See FAQs 30-34 at

http://www.dol.gov/ebsa/faqs/faq-EFAST2.html.

• Apparently, some service providers are taking legal steps

so they can act as Plan Administrator purely for

purposes of signing Form 5500 but not for other

purposes of the plan. 17

EFAST2 Changes

• 2009 Form year is obsolete effective January 1, 2014

• May no longer file 2009 Form 5500 even to amend a

previously filed 2009 Form 5500 report

• Will use the 2013 Form 5500 (or current year form)

to submit 2009 plan year information

• When using the 2013 form to submit 2009 data,

information will not appear on the DOL’s Public

Disclosure website

18

Other EFAST2 Changes

• Lots of new edit tests, but are items you likely thought

were already active!

• Official Public Disclosure Room (in Washington DC)

changes in progress

19

Electronic Filing

• Form 5500-EZ –

• [In 2011] 30% of one-participant plans e-file using

Form 5500-SF

• Form 8955-SSA – 43% e-filed [in 2013]

• Data transcription errors

• Processing concerns

• Higher chance to receive IRS contact

New IRS Proposal

• Mandatory electronic filing has been proposed by IRS for certain entities

• Only comments were submitted by American Benefits Council and ASPPA.

• Effectively, would result in “mandatory” electronic filing of Form 8955-SSA

• GAO has noted ineffectiveness of SSA collection

21

Form 8955-SSA

• FIRE system offline from December 13, 2013 to February 4, 2014

• No attachments accepted – must use official page 2

• Instruction for Line 6(a) and (b) and line 7

• Code A entries are counted for lines 6 (a) and (b)

• Line 7 should equal 6 (a) plus (b)

• Line 7 does not equal the total of separate participant listed on page 2 of the form if Codes B, C, or D are shown.

22

FIRE Your Clients!

• Electronic filing of Form 8955-SSA may prove a viable solution for many of your clients

• No signature requirements!

• You can resolve any issues

• Third party software options may include either

• Creation of a file suitable for you to initiate filing on FIRE, or

• A service that automatically initiates the FIRE filing upon your request

23

E-Filing of Form 8955-SSA

• Does the Plan Administrator have to sign an

electronic filing of Form 8955-SSA?

• NO! See [IRS] FAQ #12. On the FIRE system, it is optional to insert the name(s) of the signer(s).

• It may be “best practice” to ask the plan administrator to sign a paper copy to keep in its files, but not required.

24

Signature Requirements

• For paper filings, both plan sponsor and plan administrator must sign and date.

• If same person, then only plan administrator must sign and date.

25

Form 5558

• Form 5558 (Rev. August 2012)

• One plan per Form (manual processing – Ogden Service Campus)

• Check box added to identify first time Form 5500 series filer

• Will we ever be able to file this form electronically?

26

Form 5558 – Best Practices

• File EARLY!

• Use a shipping/mailing method that allows you to verify

receipt by IRS

• Keep track of what you sent, for which plans, and when

• Make clients aware of the confirmation they will receive

27

Form 5558 Processing Questions

• Write or fax the EP Entity Unit in Ogden using the

following contact information:

• Internal Revenue Service

Ogden, UT 84201-0018

Attention: EP Entity Unit, Mail Stop 6273

• Fax Number: (801) 620-7116

28

Other Filing Help

• Form 5500 Corner • http://www.irs.gov/Retirement-Plans/Form-5500-Corner

• Customer Account Services [1-877-829-5500]

• RetirementPlanQuestions@irs.gov

• Critical to include

• EIN, plan number, plan name

• Dates, issues, and contact information

Form 8922-B

• Used to notify IRS within 60 days of a change in

responsible party for a retirement plan

• Includes change of address section which is

optional

• An entity with an EIN (e.g., sponsor, administrator,

trust) has mandatory requirement to file form to

report change

• No penalty for failure to file

• Not entirely clear how it applies to retirement plan

filings where a Form 5500 is timely filed

30

IRS Correspondence

• To improve the processing time of your

correspondence, the following is recommended:

• Completely read and follow the instructions

provided in the notice to resolve the issue

• Include a copy of the notice you receive when

responding to the IRS

• Do not use your last contact at a Service Campus for

a new issue or question

31

IRS Correspondence

• Fax vs. Mail

• If the Notice or Letter provides an option of faxing the response for the specific case, faxing the response to the IRS eliminates mailing time only

• There is no special treatment if response is mailed or faxed

• The processing of request remains the same

• Faxing will not expedite resolution

32

What’s GAO Up To?

• Initiated a survey of preparers and researchers “to

review the clarity and usefulness of Form 5500 data

collection on plan investment information and service

provider fee information.”

• Those two groups have very competing interests.

• Preparers want data collection that is programmable

or easily retrieved from existing sources.

• Researchers want too many details (e.g., share classes

on mutual funds) 33

Schedule H Items

• Are there adequate investment categories on the face of

Schedule H?

• What good is line 1c-15 “Other”? Does the attachment

for line 4i adequately identify items reported on that

line?

• Should filers be required to report more information on

line 4i (Schedule of Assets Held) – e.g., share class or

ticker symbol for publicly traded securities? 34

Other Schedule H Issues

• Need better instructions for reporting synthetic GIC or

stable value investments

• Fair value vs. contract value, etc.

• How to report wrap contracts (also a Schedule A

issue)

• Is the “contract administrator” the same as

“recordkeeper” for a §401(k) plan?

35

Schedule C

• Should the plan be required to disclose payments to a

service provider made directly by the plan sponsor and

not charged to the plan?

• ASPPA submitted proposal to revise Schedule C [July 2013]

• Eliminate the attempt to report indirect

compensation, whether or not “eligible”

• Instead, identify those who delivered ERISA

§408(b)(2) disclosures to the plan

36

Other Tweaks

• Not on GAO radar, but should DOL consider:

• Revising Schedule A.

• What does DOL do with information collected on

welfare plans?

• Is there any value in information reported at lines

4, 5, and 7 by retirement plans?

• How many plans actually need to report

information on line 6?

37

Other Comments

• Form 5500 – line 8 Plan Characteristic Codes

• What would you add?

• What would you delete?

• What would you modify?

• Does the Form 5500 series adequately collect

information about “key” compliance thresholds?

38

Line 4a / 10a

• Reporting late deposits of participant contributions or

loan repayment withholding

• Why doesn’t DOL solicit more specific details on the

face of the form instead of letting Regional offices

badger those who admit to having late deposits?

• Audience: what are you experiencing in this regard?

• Is DOL routinely making changes to the late

deposit / lost earnings calculations you create?

• Do they ever select plans that report no late

deposits? 39

Electronic filing

• Why doesn’t electronic filing of Form 5500 allow for

more frequent and, therefore, more relevant changes to

the data being collected?

• Why do the form/instructions appear to be so resistant

to change?

40

Google Information Removal

• The DOL does not have jurisdiction over Form

5500/5500-SF information that has been posted to

Google, Bing, or any other internet site.

• If a filer wishes to have their information removed

from a specific internet site (other than the Public

Disclosure website), they must contact that internet

site directly.

41

Thank you!

questions@form5500help.com