For Calendar-Year Benefit Plans, Form 5500 Is Due July 31

Instructions reflect higher civil penalties for ERISA violations

Stephen Miller, CEBS By Stephen Miller, CEBS November 4, 2016
For Calendar-Year Benefit Plans, Form 5500 Is Due July 31
updated on July 26, 2017

Calendar-year benefit plans must file 2016 Form 5500 by July 31, 2017.  The 2016 Form 5500 instructions were updated to reflect an increase in the maximum civil penalty amount assessable under the Employee Retirement Income Security Act (ERISA), among other changes.

Advance copies of 2016 Form 5500 and 2016 Instructions for Form 5500 were issued on Nov. 1, 2016, by the U.S. Department of Labor (DOL), the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corp. (PBGC). Official electronic versions of Form 5500 and Form 5500-SF are available on the federal government's EFAST website.

For smaller filers, advance short form (SF) copies of 2016 Form 5500–SF and 2016 Instructions for Form 5500–SF also were released last November, along with supplemental materials including required Form 5500 schedules and attachments, and compliance questions and answers.

Form 5500 annual return/report filing is due the last day of the seventh month after the plan year ends, with an optional two-and-a-half-month extension. For plans that follow a calendar year, Form 5500 for the prior year is due on July 31, with an extension available to Oct. 15.

Form 5500, along with required schedules and attachments, is used to report information concerning employee benefit plans, including retirement and savings plans (such as defined benefit pension plans, defined contribution 401(k)-type plans, profit-sharing and stock bonus plans) and health and welfare plans (such as medical, dental, life insurance and disability benefit plans).

[SHRM members-only HR Q&As: What is Form 5500, and where are instructions for completing it?]

What's New

The "Changes to Note" section of the 2016 instructions highlights revisions to the Form 5500 and Form 5500-SF and their applicable schedules and instructions. These include:

Higher administrative penalties. The instructions were updated to reflect an increase in the maximum civil penalty amount assessable under the Employee Retirement Income Security Act (ERISA) section 502(c)(2). DOL regulations published in Jully 2016 increased the maximum penalty to $2,063 a day for a plan administrator who fails or refuses to file a complete or accurate Form 5500 report.

The increased penalty under section 502(c)(2) is applicable for civil penalties assessed after Aug. 1, 2016, whose associated violation(s) occurred after Nov. 2, 2015—the date of enactment of the 2015 Inflation Adjustment Act.

"While the increased penalty amounts, like their predecessors, are frighteningly large to the plan sponsor that misses a filing deadline, substantially reduced late filing penalties are available through the DOL's Delinquent Filer Voluntary Compliance Program," according to a compliance alert about the revised forms by the Lockton Benefit Group.

IRS compliance questions. Although they appear on the 2016 Form 5500, Form 5500-SF, Schedules H, I and R, the IRS has decided that:

  • Filers should not enter the "Preparer's Information" at the bottom of the first page of Form 5500 for the 2016 plan year, and should not answer the IRS questions at Lines 4o and 6a through 6d of Schedules H and I and the "Part VII—IRS Compliance Questions" of the Schedule R.

  • Filers who are using the Form 5500-SF to satisfy their annual reporting requirement should not complete the "Preparer's Information" at the bottom of the first page, "Part VIII-Trust Information," and "Part IX-IRS Compliance Questions" on the Form 5500-SF. Filers should skip these questions when completing the forms.
The IRS decision not to require completion of these compliance questions is due to privacy and misreporting concerns raised by retirement plan administrators and advisors.

Schedules H and I. My Plan Administration Account (My PAA) is a secure web-based application that enables pension plan professionals to electronically submit premium filings and payments to the PBGC. Line 5c of Schedules H and I currently asks, if a plan is a defined benefit plan, whether it is covered by the PBGC insurance program. A new question asks filers that answered "Yes" to enter the My PAA-generated confirmation number for the PBGC premium filing for the plan year.

Schedule SB. The instructions for Cooperative and Small Employer Charity 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.

Filing Requirements

Any administrator or sponsor of an employee benefit plan subject to ERISA must file information about each benefit plan every year. A small plan (generally one with fewer than 100 participants at the beginning of the plan year) may be eligible to file Form 5500-SF instead of Form 5500.
Some retirement plans and many welfare benefit plans with fewer than 100 participants are exempt from filing an annual return/report under certain conditions, as detailed in the section of the forms' instructions "Plans Exempt from Filing."

Pension and welfare benefit plans that are required to file an annual return/report regarding their financial conditions, investments and operations each year generally satisfy that requirement by filing electronically the Form 5500 or Form 5500-SF and any required attachments under the online EFAST2 system for submission, receipt and processing of these forms. Filings are made using EFAST-approved software or directly through the EFAST website. Assistance with the EFAST2 system is available online or by calling 1 (866) 463-3278.

Many consultants, agents, CPA’s and law offices can assist in preparing the 5500 filing but "it is important to note, however, that the sole responsibility for the filing falls on the employer," advised Gary B. Kushner, president and CEO of Kushner & Co., a benefits advisory based in Portage, Mich.

Expanding Reporting Ahead

Early this year, the federal agencies that govern employee benefit plans proposed substantial revisions to Form 5500 reporting requirements. Millions of employers with currently exempt plans may be compelled to file annual reports under the new rules, intended to increase transparency, improve data mining and modernize reporting requirements, according to proposed Form 5500 revisions published last July.

The agencies are targeting the 2019 plan year for implementation of the revised filing requirements, meaning they would take effect for reporting due in July 2020.

Related Articles and Resources:

Form 5500 Series - Electronic Filing Requirements, U.S. Department of Labor

Form 5500 Filing Reminder and Information on Employee Assistance and Wellness Plans, PKF O’Connor Davies

5500 Filings for Health and Welfare Plans – The Forgotten Filing, Kushner & Company

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