FORM 5500 EXPLAINED:
Qs & As FOR 2009 FILERS
James R. Griffin
Jackson Walker L.L.P.
214.953.5827
jgriffin@jw.com
What is Form 5500?
• The Form 5500 annual return/report is used to report
information concerning employee benefit plans to:
– IRS
– DOL
Who is entitled to see the Form 5500?
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Internal Revenue Service
Department of Labor
Pension Benefit Guaranty Corporation
Plan participants
– Beginning with 2008 5500s, certain defined benefit plan
actuarial information must be posted on the plan sponsor’s
intranet website.
• Public
– www.freeerisa.com
What is a Summary Annual Report
and when is it due?
• A document that must be distributed to all
participants in an employee benefit plan at the end of
the plan year
• The summary annual report contains financial and
related information about the plan
• Due within 2 months after the original or extended
Form 5500 filing deadline
Where can I get information about
Form 5500?
• EFAST Help Line
• 1-866-463-3278
• Monday through Friday
• 8:00AM to 8PM, Eastern Time
What websites are available about
Form 5500?
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www.efast.dol.gov
View forms and related instructions
Get information about approved software vendors
Answers to Frequently Answered Questions
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www.irs.gov
View forms, instructions and publications
Answers to Frequently Answered Questions
Sign up to receive retirement plan newsletters via email
What employee benefit plans must have a
Form 5500?
• Every pension benefit plan
• Every welfare benefit plan
How many plans can be included within
each Form 5500?
• One Form 5500 is generally required for each plan
Can several benefit arrangements be included
within one plan for Form 5500 filing purposes?
• Plan sponsors can offer benefits through various
structures and combinations
• Governing documents and actual operations must be
reviewed to determine whether welfare benefits are
being provided under a single plan or separate plans
• Having separate insurance policies for each different
welfare benefit does not necessarily mean that the
employer has separate plans
What is a wrap plan?
• A document that incorporates various benefits and
insurance policies into one comprehensive plan
What is a plan number and
how is it assigned?
• Plan numbers are self-assigned by the employer
• For pension benefit plans, start at 001 for the first plan and
then consecutively number other plans as 002, 003, etc.
• For welfare benefit plans, start at 501 for the first plan and
then consecutively number other plans as 502, 503, etc.
• Once you use a plan number for a plan, continue to use it for
that plan on all future filings with IRS, DOL and PBGC
• Do not re-use a plan number even if the plan is terminated.
What is the Form 5500 filing status of a plan that
covers employees of a parent corporation and its
subsidiaries?
• Multiemployer Plan—No
• Multiple-Employer Plan—No
• Single-Employer Plan--Yes
What are pension benefit plans?
• Profit sharing, stock bonus, money purchase and
401(k) plans
• 403(b) plans
• Defined benefit plans
• Cash balance plans
Are any pension benefit plans excluded
from filing Form 5500?
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Governmental plans
Church plans
SIMPLE plans funded with SIMPLE IRAs
SEP
Top hat plans that benefit a select group of
management or highly compensated employees but
only if a registration statement is timely filed with
DOL
What is Form 5500-EZ?
• Filing for one-participant plans that cover owners
only and their spouses
• Not required if plan had total assets of $250,000 or
less on or after January 1, 2007
What are welfare benefit plans?
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Medical
Dental
Life insurance
Apprenticeship and training
Scholarship funds
Severance pay
Disability
Are any welfare benefit plans excluded
from filing Form 5500?
• Welfare benefit plans that covered fewer than 100
participants as of the beginning of the plan year and
are:
– Unfunded
– Fully insured
– A combination of insured and unfunded
• Governmental plans
• Church plans
What is the 80/120 rule?
• If the number of participants that is reported on Line
6 of Form 5500 is between 80 and 120, and a Form
5500 was filed for the prior plan year, the employer
may elect to complete the Form 5500 in the same
category (“large plan” or “small plan”) as was filed
for the prior year Form 5500.
When does an employee become
a participant?
• For welfare benefit plan purposes, an employee
becomes a participant on the earlier of:
– The date specified in the plan document
– The date the individual becomes eligible for a benefit,
subject only to the occurrence of a contingency for which
the benefit is provided
– The date the individual makes a contribution to the plan,
whether voluntary or mandatory
What is an unfunded plan?
• Benefits are paid as needed directly from the general
assets of the employer that sponsors the plan
• Plans that are not “unfunded”:
– Plans that receive employee contributions
– Plans that use a trust to hold plan assets
• Plans are are “unfunded”:
– Plans with employee contributions that are associated with
a cafeteria plan
– Plans with COBRA premiums
When is the Form 5500 due?
• All required forms, schedules, statements and
attachments must be filed by the last day of the 7th
calendar month after the end of the plan year that
began in 2008
• July 31, 2009 for calendar year plans
• Next business day if the filing deadline is on a
Saturday, Sunday or Federal holiday
What is the plan year?
• 12 month period
• Set out in plan document or
SPD
• Policy year
• Calendar year
Can the due date of Form 5500
be extended?
• File Form 5558 before the Form 5500 filing deadline
to obtain an extension of up to 2 ½ months
• October 15, 2009
• www.irs.gov
• Filing address:
Department of the Treasury
Internal Revenue Service Center
Ogden UT 84201-0027
Are other extensions possible?
• An automatic extension of the Form 5500 filing
deadline will be granted until the due date of the
employer’s Federal income tax return if:
– The plan year and the employer’s tax year are the same
– The employer has been granted an extension of time to file
its Federal income tax return
– A copy of the application for extension of the time to file
the Federal income tax return is attached to the Form 5500
• September 15, 2009
Are there any more extensions?
• Special extensions under certain circumstances
• Presidentially-declared disaster areas
What penalties apply if a Form 5500
is filed late?
• $1,100 a day for each day that a plan administrator
fails or refuses to file a complete Form 5500
• $25 a day (up to $15,000) for not filing returns
required to be filed with IRS
• Willful violation of ERISA—fine of not more than
$100,000 or not more than 10 years in prison or both
• Making any false statement or representation of fact,
knowing it to be false, or for knowingly concealing or
not disclosing any fact required by ERISA—fine of
not more than $10,000 or 5 years prison or both
Is there any way to reduce the penalties?
• Delinquent Filer Voluntary Compliance Program
• http://www.dol.gov/ebsa/FAQs/faq_DFVC.html
Can I print out a blank Form 5500
from the internet for my filing?
• No
• Computer generated forms can only be completed via
computer
• Hand print forms may be obtained from IRS
• 1-800-829-3676
• Copies of hand print forms are not acceptable
• All filings for the 2009 plan year must be made
electronically
How can a Form 5500 filing be amended?
• Submit a completed, signed and dated Form 5500
• Attach schedules or attachments that are being
changed
• Do not attach schedules or attachments that are NOT
being changed
Who must sign a Form 5500?
• Plan administrator must sign and date a Form 5500
filed for a pension or welfare plan
• Either the plan administrator or the employer may
sign and date a Form 5500 filed for a pension plan.
What other penalties apply to Form 5500?
• Under penalties of perjury and other penalties set
forth in the instructions, I declare that I have
examined this return/report, including accompanying
schedules, statements and attachments, as well as the
electronic version of this return/report if it is being
filed electronically, and to the best of my knowledge
and belief, it is true, correct and complete.
Who is the Plan Administrator?
• The person specifically so designated by the terms of
the instrument under which the plan is operated
• If an administrator is not so designated, the plan
sponsor
• In the case of a plan for which an administrator is not
designated and a plan sponsor cannot be identified,
such other person as the Secretary may by regulation
prescribe.
How long should I keep previously filed
Form 5500s?
• All plan-related materials should be kept for a period
of at least six years after the date of filing of an
ERISA-related return or report, and the materials
should be preserved in a manner and format
(electronic or otherwise) that permits ready retrieval
• All records that support the plan’s annual reporting
and disclosure should be retained for the same period
of at least six years
What are the common filing mistakes?
• Failure to sign and date the Form 5500 and related
schedules
• Math errors
• Incorrect business activity code
• Failure to use approved software or the official
handprint forms
• Failure to use proper EIN and plan number
• Failure to use proper plan characteristic codes
FORM 5500 EXPLAINED:
Qs & As FOR 2009 FILERS
James R. Griffin
Jackson Walker L.L.P.
214.953.5827
jgriffin@jw.com