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

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1 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 With more than 35 years in the employee benefits field, her resume includes consulting firm and large accounting firm background.

2 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 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.

3 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).

4 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

5 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: (Motorcycle Dealers) (All Other Motor Vehicle Dealers) (Household Appliance Stores) (Radio, Television, & Other Electronics Stores) (Computer & Software Stores) (Camera & Photographic Supplies Stores) (prerecorded Tape, Compact Disc, & Record Stores) (Heating Oil Dealers) (Liquefied Petroleum Gas (bottled gas) Dealers) (Other Fuel Dealers) (Cooperative Housing (including equity REITs) (Limited Service Eating Places)

6 Revised Business Codes New: Motorcycle, ATV, and All Other Motor Vehicle Dealers Household Appliance Stores Electronics Stores (including Audio, Video, Computer, and Camera Stores) Fuel Dealers (including Heating Oil and Liquefied Petroleum) Reinsurance Carriers Limited-Service Restaurants Cafeterias and Buffets Snack and Non-alcoholic Beverage Bars Changed: Women s & Girls Cut & Sew Apparel Mfg (was ) Other Cut & Sew Apparel Mfg (was ) Full Service Restaurants (was ) 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

7 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

8 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

9 Who Must Sign? For EFAST2 purposes, only the electronic signature of the plan administrator is necessary to process the filing. See FAQs at 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

10 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

11 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

12 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

13 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

14 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 Attention: EP Entity Unit, Mail Stop 6273 Fax Number: (801)

15 Other Filing Help Form 5500 Corner Customer Account Services [ ] 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

16 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

17 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

18 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

19 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

20 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

21 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