OUR THOUGHTS ON:

Form 5500 Changes

ERISA|Higher Education|Not-for-Profit

By Patti Giudici

The following changes have been made to the Form 5500 for 2016 filings:

  1. Administrative Penalties – The new maximum penalty for a plan administrator who fails or refuses to file a complete and accurate Form 5500 was increased to $2,063 a day.
  2. Schedules H and I - Line 5c is has been changed to signify whether a defined benefit plan is covered by the PBGC insurance program. If the plan is covered by the PBGC insurance program, then the My PAA (My Plan Administration Account) confirmation number is required to be added onto Form 5500.
  3. Schedule SB – Instructions for CSEC plans have been updated to include guidance relating to the Cooperative Small Employer Charity Pension Flexibility Act.
  4. IRS Compliance Questions
    1. The preparer’s information on the first page of Form 5500 is not yet required to be completed.
    2. Questions 4o and 6a through 6d on Schedules H and I are not yet required to be completed (Part V Trust Information).
    3. Schedule R, Part VII is not yet required to be completed.

The DOL, IRS, and PBGC, issued a proposal to modernize and improve the Form 5500 in July 2016. An extension for comment letters was granted until December 5, 2016. The proposed changes are intended to address changes in applicable laws, the employee benefit plan and financial market sectors, and changes in the data needed for policy setting, compliance assistance, and more. The proposed standards would also expand the information that would be publicly available. The proposed standards fall under five goals including the following:

  1. Modernizing financial reporting
  2. Providing greater information regarding group health plans
  3. Enhancing data mineability
  4. Improve service provider fee information
  5. Enhancing compliance with ERISA and the Code

The proposed changes would also require certifications for limited scope audits to be more informative.

The DOL, IRS, and PBGC are currently reviewing the comment letters and the final changes are expected to be issued in future periods. 

If you have questions about these changes, please contact us.  

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.

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