OUR THOUGHTS ON:

Benefit Plan Sponsors: Are You Ready for October 15th?

ERISA

By Rob Meyers

Fall is almost here and that means one thing: time to file your Form 5500.  While the form itself is normally completed by your accounting firm or the plan trustee or recordkeeper, the plan sponsor has a fiduciary duty to ensure that all information on the form is accurately reported.  To ensure that your Form 5500 is accurate, plan sponsors should be aware if any of the following items exist:

Late Remittances of Contributions – The Department of Labor defines the appropriate timing for employee contribution remittances as “when assets can be reasonably segregated.” Typically, the Department of Labor will review when payroll taxes were remitted and utilize this as a benchmark to define when contributions are considered to be late.  When a late remittance occurs, interest must be accrued and paid to employee accounts based on the number of days the remittance was late.

Alternative Investments – Due to the structure of various complex and alternative investments, plan sponsors might be required to report investments at contract value as opposed to fair value, on the Form 5500.  The most common investment to which this requirement applies is a guaranteed investment contract with an insurance broker.

Excess Contributions – For 2013, the maximum contribution amount is $17,500 with an additional $5,500 as a catch-up for all employees over 50 years of age.  However, if no safe harbor match is made, the maximum amount could potentially be reduced.  To see if your plan requires repayment to participants, contact your plan trustee regarding the results of the ADP/ACP Discrimination testing.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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