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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
www.form5500help.com.] With more than
35 years in the employee benefits field, her
resume includes consulting firm and large
accounting firm background.
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 2000. 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.
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).
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
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:
• 441221 (Motorcycle Dealers)
• 441229 (All Other Motor Vehicle Dealers)
• 443111 (Household Appliance Stores)
• 443112 (Radio, Television, & Other Electronics Stores)
• 443120 (Computer & Software Stores)
• 443130 (Camera & Photographic Supplies Stores)
• 451220 (prerecorded Tape, Compact Disc, & Record Stores)
• 454311 (Heating Oil Dealers)
• 454312 (Liquefied Petroleum Gas (bottled gas) Dealers)
• 454319 (Other Fuel Dealers)
• 531114 (Cooperative Housing (including equity REITs)
• 722210 (Limited Service Eating Places)
Revised Business Codes
New: • 441228 - Motorcycle, ATV, and All Other Motor Vehicle Dealers
• 443141 - Household Appliance Stores
• 443142 - Electronics Stores (including Audio, Video, Computer, and Camera Stores)
• 454310 - Fuel Dealers (including Heating Oil and Liquefied Petroleum)
• 524130 - Reinsurance Carriers
• 722513 - Limited-Service Restaurants
• 722514 - Cafeterias and Buffets
• 722515 - Snack and Non-alcoholic Beverage Bars
Changed: • Women’s & Girls’ Cut & Sew Apparel Mfg - 315240 (was 315230)
• Other Cut & Sew Apparel Mfg - 315280 (was 315290)
• Full Service Restaurants - 722511 (was 722110)
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
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
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
Who Must Sign?
• For EFAST2 purposes, only the electronic signature of
the plan administrator is necessary to process the filing.
• See FAQs 30-34 at
http://www.dol.gov/ebsa/faqs/faq-EFAST2.html.
• 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
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
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
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
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
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 84201-0018
Attention: EP Entity Unit, Mail Stop 6273
• Fax Number: (801) 620-7116
28
Other Filing Help
• Form 5500 Corner • http://www.irs.gov/Retirement-Plans/Form-5500-Corner
• Customer Account Services [1-877-829-5500]
• 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
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
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
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
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
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
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!