Form 5500 Penalty Relief Deadline Approaching for MEPs

On July 24, 2019, the Department of Labor (the “DOL”) issued Field Assistance Bulletin 2019-01 (the “Bulletin”), which provides transition relief to multiple employer plans (“MEPs”) that failed to comply with certain annual reporting requirements. 

The Bulletin focuses on a Form 5500 reporting requirement added by the Cooperative and Small Employer Charity Pension Flexibility Act, which requires MEPs to report on the Form 5500 all participating employers and an estimate of the percentage of contributions made by participating employers during the plan year.  This disclosure requirement first became effective for plan years beginning after December 31, 2013.             

The DOL has identified widespread and ongoing failure by MEPs to comply with the above reporting requirement.  Read More ›

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Contemplating a Severance Plan? Consider ERISA

A severance plan may be subject to the requirements of ERISA as an employee welfare benefit plan. The determination of whether a severance plan is subject to ERISA depends in large part on whether the plan is part of an “ongoing administrative scheme.”

Severance plans subject to ERISA have certain requirements, such as the obligation to file annual Forms 5500, to follow ERISA’s formal claims procedure, and to provide a summary plan description (“SPD”), a summary annual report (“SAR”), and any required summaries of material modification (“SMM”) to participants.

For a severance plan subject to ERISA, failure to comply with these requirements can carry a hefty fee – up to $110 per day for failure to provide required documents to participants on request and up to $1,100 per day for failure to file a Form 5500. Read More ›

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IRS: Don’t Answer All the 5500 Questions!

The 2015 Form 5500 added some new optional compliance questions for the 2015 Forms 5500 and 5500-SF. In December 2015, the IRS issued frequently asked questions on the new compliance questions and strongly encouraged plan sponsors to answer the questions.

On February 18, the IRS changed course and announced that plan sponsors should not complete the compliance questions on the 2015 Form 5500 and Form 5500-SF and related schedules because the questions were not approved by the Office of Management and Budget before the forms were published.

For additional information including a list of the questions that may be skipped on the Forms 5500 and 5500-SF, please go to https://www.irs.gov/Retirement-Plans/IRS-Compliance-Questions-on-the-2015-Form-5500-Series-Returns. Read More ›

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Form 5500 Deadline is Quickly Approaching

As a reminder, the annual Form 5500 deadline is quickly approaching.  Calendar year employee benefit plans that applied for an extension must file Forms 5500 by Thursday, October 15, 2015.

The Form 5500 Annual Return/Report of Employee Benefit Plan is a consolidated annual report developed by the Department of Labor (DOL), Internal Revenue Service and the Pension Benefit Guaranty Corporation.

Generally, a Form 5500, plus any required schedules and attachments, must be completed and filed electronically each year for every pension benefit plan, welfare benefit plan and every entity that files as a Direct Filing Entity (DFE).  There are certain filing exceptions for small, unfunded and/or fully insured welfare plans. Read More ›

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IRS Provides Penalty Relief for Late Form 5500 Filers

Plan administrators that fail to timely file their Form 5500s can be subject to penalties under both ERISA and the Code.  The Department of Labor’s Delinquent Filer Voluntary Compliance Program (“DFVCP”) provides plan administrators with the opportunity to pay reduced Department of Labor penalties for late Form 5500 filings.  The DFVCP among other things, requires plan administrators to file the late Form 5500s through the DOL’s EFAST2 system.  The DFVCP, however, does not address any penalties that may be imposed by the IRS.

In recently released IRS Notice 2014-35, the IRS stated that it will not impose penalties under Code Sections 6652(d), 6652(e) and 6692 on late Form 5500 filings if the plan administrator: (i) is eligible for and satisfies the requirements of the DFVCP, and (ii) files separately with the IRS a Form 8955-SSA that provides the information required under Code Section 6057 for the late year and otherwise satisfies the requirements of Notice 2014-35.  Read More ›

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