is designed to complement official guidance and other internet
resources available to preparers of Form 5500 for qualified retirement
and welfare benefit plans.
year, businesses and organizations that sponsor an employee benefit
plan subject to ERISA must file Form 5500. These forms are filed with
the Employee Benefits Security Administration’s EFAST operation in
Lawrence, Kansas without regard to the plan year. All current, late, or
amended filings are processed by EFAST.
sponsors and practitioners -- employee benefit consultants,
accountants, attorneys, and other service-providers -- often find the
instructions to the Form 5500 to be vague or ambiguous resulting in
many hours of frustration while preparing the reports for both pension
and welfare benefit plans. Form5500HELP.com offers practical advice to
consider when completing the various forms and schedules associated
with these filings.
We also lead you to other websites so you can
- quickly download forms,
- locate official regulations and other guidance,
- find software to simplify preparation,
copies of forms already on file with the Internal Revenue Service and
the Employee Benefits Security Administration, and much more.
How To Comment on the DOL’s
Form 5500 Modernization Proposal
Posted: October 21, 2016
The DOL is making it fairly easy to comment on its Form 5500
modernization proposal. The proposal appeared in the July 21,
2016 edition of the Federal Register.
To make a comment by email, simply go to https://www.regulations.gov/comment?D=EBSA-2016-0010-0001.
The subject line should include RIN 1210-AB63. You may simply
type in your message and may identify yourself in any way you choose,
including as an Anonymous writer.
Any comment submitted is subject to public disclosure and will ultimately appear at https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments/1210-AB63.
Please consider submitting a comment, even if it
relates to a narrow aspect of the proposal. The ultimate quality
and reliability of the modernized form depends on the public’s input.
DOL’s Office of Chief Accountant
Provides Tips for Selecting and Monitoring
an Employee Benefit Plan Auditor
Posted: November 16, 2015
In May 2015 the DOL’s Office of Chief Accountant (OCA) issued a report [click here]
after it completed an assessment of the quality of audit work performed
by independent qualified public accountants with respect to financial
statements associated with 2011 Form 5500 filings. The review found
that only 61% of the audits fully complied with professional auditing
standards or had only minor deficiencies under professional standards.
Further, 39% of the audits contained major deficiencies which could
lead to a rejection of the related Form 5500 filing.
Unfortunately, these findings are consistent with
results of similar reviews since the 1990s. In other words, audit
quality continues to suffer. The OCA has undertaken a strategy to
improve these outcomes, starting with communications to plan
Outreach to Form 5500 Filers
Beginning November 12, 2015, the OCA began sending
correspondence, by email, to every Form 5500 filer that is required to
include an audit report with its filing. The email includes a
subject line of “Your Employee Benefit Plan Audit” along with a letter
with a subject line of “Tips for Selecting and Monitoring a Plan
Auditor.” [click here]
The email identifies several steps that should be considered when evaluating a benefit plan auditor:
It should be noted that the OCA will direct the email to the address in
the EFAST2 system for the individual who executed the signing ceremony
as—or on behalf of—the plan administrator. For service providers
that assist clients in managing the filing process using the procedures
outlined in EFAST2 FAQ 33a [click here],
the service provider will be the recipient of the email described
above. It is important for the service provider to forward the
email to the plan administrator under the requirement “that
the service provider will communicate to the plan
administrator/employer any inquiries and information received from
EFAST2, DOL, IRS or PBGC regarding the return/report.” Additional
explanatory information may be provided by the service provider when
forwarding the communication to the plan administrator/employer.
There are tools to assist plan administrators in the selection of employee benefit plan auditors, including the following:
Not a Notice of Enforcement
The correspondence is meant to be a soft touch with
plan administrators about the importance of selecting a truly qualified
audit firm. The email welcomes comments or questions at PlanForAuditQuality@dol.com.
Responses to comments or questions will be provided by Scott Albert, who is Chief of the Division of Reporting Compliance.
- The number of employee benefit plans the CPA
firm audits each year, including the types of plans, as there is a
clear link between the number of employee benefit plan audits performed
by a CPA firm and the quality of the audit work performed;
- The extent of specific annual training in auditing plans;
- The status of the CPA’s license with the applicable state board of accountancy;
- Whether the CPA has been the subject of any
prior DOL findings or referrals, or has been referred to a state board
of accountancy or the AICPA for investigation; and
- Whether or not the CPA’s employee benefit plan
audit work has recently been reviewed by another CPA firm (i.e., peer
reviewed) and whether such review resulted in negative findings.
DOL Initiative on Missing Plan Audit Reports
Posted: November 5, 2015
On Monday, November
2, 2015, the Employee Benefit Security Administration (EBSA) sent about
1,200 letters by email to filers of 2014 Form 5500 that did not
properly include the report of an independent accountant. The emails do
not constitute enforcement correspondence – that is, the letters are
not Notices of Rejection of the Form 5500 filing and do not start the
running of the statutory 45-day correction period.
Late Filer Penalty Relief Now Permanently Available
to Form 5500-EZ Filers
Posted: June 14, 2015
Emails of this type generally are sent to the
individual whose credentials were used to file the Form 5500 series as
or on behalf of the plan administrator the Form 5500 using the EFAST2
guidelines. If the practitioner/filer rules were employed,
generally the practitioner will be the recipient of the email.
However, the correspondence should be a warning that
the DOL has the situation on its radar and put pressure on the plan
sponsor/administrator and the benefit plan auditor to quickly wrap up
the audit and file an amended 2014 Form 5500 report including the
report of the independent accountant. If the 2014 filing is not
perfected in the next few weeks, such filers should expect EBSA to
issue formal Notice of Rejection letters, which will be sent via USPS
or UPS. These letters generally will be directed to the plan
administrator named on the filing and will indicate that the 45-day
statutory correction period has begun.
Based on the success of its pilot program granting relief from certain
late filing penalties for Form 5500-EZ filers, the IRS has implemented
a permanent late filer program under Revenue Procedure (“Rev Proc”)
2015-32 [click here].
The new program is effective June 3, 2015. Returns submitted before
June 3, 2015 under the pilot program will be processed in accordance
with Rev Proc 2014-32.
IRS notes that all of the comments it received were in favor of
replacing the pilot program with a permanent program, and that two
commenters (including ASPPA) suggested potential fee structures. The
permanent program generally follows the requirements of the pilot
program, with the addition of a payment requirement.
New Penalty Structure
The payment for each submission is $500 for each delinquent return for
each plan, up to a maximum of $1,500 per plan. The IRS has created Form
14704 [click here] to be used as a transmittal schedule and attached to the oldest delinquent return in the late filing submission.
All payments under this program must be submitted by a check payable to
the United States Treasury and must be attached to the Form 14704 that
is included as part of the submission. The filer’s EIN and plan number
should be written on the face of the check.
The IRS will contact the applicant if the Form 14704 is not included
with the package, the late Form 5500-EZ reports are inconsistent with
the Form 14704, a required signature on a delinquent return is not
provided, or the amount of the payment is incorrect. If the submission
is complete, the filer will not hear from the IRS.
Who is eligible for the relief?
The relief under the Rev Proc is available only to the plan
administrator or plan sponsor of (1) certain one-participant plans, as
that term is defined in the Instructions for Form 5500, and (2) certain
A one-participant plan is a retirement plan that covers one or more
participants who are the only owner of the entire business (or the
owner and the owner’s spouse) or one or more partners (or partners and
their spouses) in a business partnership. Such plans do not
provide benefits for anyone except the owner (or the owner and the
owner’s spouse) or one or more partners (or partners and their
spouses). It should be noted that under Section 1103(a)(2)(E) of PPA
2006, the term partner was modified to include an individual who owns
more than 2 percent of an S corporation.
A foreign plan is a retirement plan maintained outside the United
States primarily for nonresident aliens and is eligible for relief
under the Rev Proc if the employer than maintains the plan is a
domestic employer or a foreign employer with income derived from
sources within the U.S. (including foreign subsidiaries of domestic
employers) that deducts contributions to the plan on its U.S. income
What must be filed?
To qualify for the permanent late filing program relief, only paper
filings will be accepted. What must be filed depends on the year(s)
involved and the type of plan. Unlike the DOL’s delinquent filer
program, the form for the actual plan year must be used (rather than a
current year form). So, if the late filing involves a 2004 plan year,
the filer must locate a 2004 Form 5500 series return. IRS points to
or as sources for prior year returns. Practitioners may have
software for those old years that enables them to easily generate
filings for signature and submission to IRS without looking for paper
Because it may be difficult to locate plan year Form 5500-EZ returns,
the IRS will allow reports for plan years prior to 1990 to be completed
on a current-year Form 5500-EZ
2008 Plan Years and Earlier
The specific Form 5500 series return that was required for the plan
year must be submitted. It should be noted that, for 2005 and earlier
plan years, a one-participant plan (or combination of plans) with less
than $100,000 of total plan assets at the end of the plan year were not
required to file Form 5500 series reports. Thereafter, PPA 2006 set the
threshold as $250,000 or less at the end of the plan year and requires
filings only for years in which that dollar amount is met.
In addition, filers should recall that one-participant plans covering
more than 100 participants or that were combined with another
plan for coverage testing purposes were required to file Form 5500, and
not Form 5500-EZ, prior to 2009. However, the IRS is simplifying the
permanent program by permitting filers that would have been
required to file a Form 5500 under the pilot program to instead file a
current-year Form 5500-EZ return, completing the report with the
beginning and ending dates for the plan year for which the return was
2009 and Later Plan Years
Only the Form 5500-EZ appropriate for the plan year may be submitted;
therefore, a delinquent Form 5500-SF may not be filed through the
EFAST2 system (or on paper) under this pilot relief program.
Plans with Actuarial or ESOP Schedules
For plan years prior to 2005, a Schedule B (Actuarial Information) must
be included with a Form 5500 series report for any non-Title 1 defined
benefit plan and certain money purchase plans.
For plans years beginning in 2005 and later, a Schedule B (or Schedule
SB, its successor) was not required to be filed by such plans and so is
not part of the requirements for this program. However, an applicant
must include in the submission a representation that the applicable
annual actuarial report has been prepared and the statement must be
attached to the return in lieu of the Schedule B (or Schedule SB).
ESOP sponsors must include Schedule E (ESOP Annual Information) for plan year filings prior to 2005.
How to File
The Revenue Procedure stresses that all of the following steps must be
taken. Failure to follow these steps may cause the IRS to treat the
return as ineligible for the program’s relief and to assess late filing
penalties. The Service notes that multiple returns may be included in a
single submission but that each plan’s late filings must be separately
submitted. For example, a business sponsors a profit sharing plan and a
money purchase plan, both of which have failed to file Form 5500-EZ for
the 2010 through 2013 plan years. The sponsor must submit a package
containing only the profit sharing plan late reports separately from
the submission that covers the money purchase plan late filings.
Any late filing must be submitted on paper.
In addition, the applicant must mark in red letters in the top margin
of the first page (above the title of the form) of each late filing:
DELINQUENT RETURN SUBMITTED UNDER REV. PROC. 2015-32,
ELIGIBLE FOR PENALTY RELIEF
Each submission must include a completed paper copy of Form 14704 and
the appropriate fee. It must be attached to the front of the oldest
delinquent return in the submission. For example, if delinquent returns
for 2010, 2011, and 2012 for ABC Profit Sharing Plan are included in
the same submission, Form 14704 must be attached to the front of the
Where to File
All delinquent filers applying for relief under this Rev Proc should
send he late filings, Form 14704, and appropriate penalty payment to:
Internal Revenue Service
1973 North Rulon White Blvd.
Ogden, UT 84404-0020
The usual private delivery services may be used. These include DHL, FedEx, and UPS.
As with the pilot program, the Rev Proc states that filers may continue
to request relief from late filing penalties due to reasonable cause in
lieu of the relief provided under the procedure. Any other late Form
5500-EZ filing that has already been submitted is not entitled to the
relief provided under this Rev Proc if the filer has already received a
CP 283 Notice from IRS, in which a penalty has been assessed.
IRS Requires Electronic Filing of
[Certain] Forms 8955-SSA, 5500-EZ, and Schedules MB/SB
Posted: September 30, 2014
In early September 2014, IRS posted an updated Retirement Plan Reporting and Disclosure Requirements [click here]
document that indicated, on page 3, that certain 2014 Form 8955-SSA and
2015 Form 5500-EZ filings were required to be filed electronically. At
that time, it had not finalized the regulation it had proposed on
August 30, 2013 in which mandatory electronic filing rules for these
reports were first introduced.
It should be noted that the draft 2014 Form 8955-SSA [click here] and its instructions [click here], posted in August 2014, make no mention of the electronic filing mandate that may apply to such filings.
the Treasury has released the final regulations for employee benefit
plan returns that are required to file on so-called magnetic media
(i.e., electronically). [click here]
The preamble notes that IRS does not have the capability to accept
electronic filings of delinquent Form 8955-SSA or Form 5500-EZ that are
being submitted under either Notice 2014-35 or Rev. Proc. 2014-32,
respectively. [See the articles posted May 12, 2014 below.]
IRC §6011(e)(2) generally allows the IRS to require the filing of
returns on magnet media when 250 or more returns are filed by the same
person. The regulations count all federal filings of the “person”
toward the 250 threshold.
plan administrator is responsible for filing Form 8955-SSA and the
Schedules MB/SB (Form 5500), while both the plan sponsor and plan
administrator are responsible for filing Form 5500-EZ. Therefore, where
the plan sponsor is also designated as the plan administrator, the
capacity in which the filer acts is irrelevant. For example, the 250
threshold is met by counting all Forms W-2, 1099, 941, 1120, 5500, 945,
and other federal filings of the plan sponsor (that is also the plan
broad interpretation will lead many service providers to conclude that
it’s more expedient to treat all filers as subject to the new mandate
rather than devote resources to determining which filers are affected.
Why make this assumption? If a filer that is required to file
electronically fails to do so, the filer is deemed to have failed to
a committee or individual is specifically named as plan administrator,
the 250 filing threshold is separate from that of the plan sponsor.
However, service providers are likely to ignore this distinction in
setting procedures and, again, may transition all plans to the e-filing
process to better manage their operations.
2014 Form 8955-SSA E-Filing Mandate
The new rules apply to any Form 8955-SSA for a plan year that begins on
or after January 1, 2014 for which the filing is due (not taking into
account extensions) on or after July 31, 2015. It is worth noting that
nearly 43% of Form 8955-SSA filings made during 2013 were made
electronically, even without the mandate.
IRS system known as FIRE (Filing Information Returns Electronically) is
used to make electronic submissions of Form 8955-SSA. The IRS currently
has no specific plans to make certain improvements to the system that
might better accommodate those who have a large volume of filings to
submit, although the preamble to the final regulation notes that
[ASPPA’s] comments on possible FIRE system improvements have been
forwarded to the staff at IRS responsible for that system.
2015 Form 5500-EZ Filing Mandate
electronic filing mandate is pushed off to plan years that begin on or
after January 1, 2015 for filings with a due date (not taking into
account extensions) after December 31, 2015. In preparing for this
shift, the draft 2014 Form 5500-EZ [click here] and its instructions [click here]
for the first time permit foreign plans and those one-participant plans
that cover more than 100 participants to file Form 5500-SF through
EFAST2 as an alternative to submitting a paper Form 5500-EZ.
submitted to EFAST2 under this requirement will not be posted on the
DOL’s electronic public disclosure website so long as the
one-participant or foreign plan boxes are properly checked on the Form
Mandatory Electronic Filing of Actuarial Schedules MB/SB
with 2009 plan years, filers of Form 5500 series reports generally
submitted any required actuarial schedules electronically through
EFAST2. An exception permitted one-participant retirement plans and
foreign plans to merely collect and retain such information and did not
require the schedules to be part of their Form 5500 filing.
assured the new regulation continues to relieve one-participant plan
and foreign plan filers of attaching the actuarial schedule to their
Form 5500 series filing. The electronic mandate for actuarial schedules
is effective for plan years that begin on or after January 1, 2015 for
filings with a due date (not taking into account extensions) after
December 31, 2015.
Clarification of Form M-1 Attachment
to the 2013 Form 5500
Posted: January 12, 2014
the 2013 Form 5500 Series Official Release article posted below (on
December 13, 2013), we discuss the new requirement for all welfare plan
filings to include a special attachment. There seemed to be some
ambiguity in the official instructions (see page 18 of the 2013 Instructions for Form 5500 [http://www.dol.gov/ebsa/pdf/20135500inst.pdf] ) so I reached out to the Department of Labor for comment.
Here’s what I learned:
- Any 2013 Form 5500 report that shows a plan number of 501 or greater at line 1b must include the attachment.
2013 Form 5500 filing for a retirement plan that shows a welfare plan
feature code at line 8b (e.g., code 4B to indicate that life insurance
is available under the plan) does not need to provide the attachment.
- 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;
not required to file Form M-1 and is otherwise eligible, may file Form
5500-SF. No attachment to report Form M-1 compliance is needed for a
Form 5500-SF filer.
Form M-1 compliance item will be incorporated into the 2014 Form 5500
thereby eliminating the attachment for subsequent years.
Who Must Sign Form 5500?
Posted: January 9, 2014
question has come at me from several angles recently, so it may be
helpful to have the rules clearly laid out.The starting point is page 6
of the 2013 Instructions for Form 5500.
Let’s break this down by authority:
plan administrator must sign and date a Form 5500 filed for a
retirement or a welfare plan under ERISA §104 or 4065 (or both).
the plan administrator or the employer (plan sponsor) may sign and date
a Form 5500 filed for a retirement plan under IRC §6058. Generally, a
Form 5500 filed for a pension plan is filed under both ERISA §104 and
most filings require only the signature of the plan administrator. That
said, there may be a preference on the part of the plan administrator
and employer to affix both signatures when those are separate persons.
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.
are several exceptions to the rules outlined above. First, when a 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 and date the Form 5500. Generally, these are
collectively bargained plans and may be single employer or
exception applies for Form 5500 reports submitted by direct filing
entities (DFEs). Here, the filer signs not as the plan administrator or
sponsor, but as the DFE on the separate signature line provided on the
face of the Form 5500.
New Round of DOL Inquiry Letters
Posted: May 16, 2013
U S Department of Labor’s Office of the Chief Accountant (OCA) has
begun sending correspondence -- both by paper and email -- asking the
plan sponsor whether it also sponsors a health benefit plan. The letter
reminds filers that certain employee welfare benefit plans must file
inquiries are being directed to filers of 2011 Form 5500 for retirement
plans, without regard to whether the retirement plan is a small or
large plan. The correspondence asks the addressee to provide "information to determine whether you were required to file form 5500 for a health benefit plan for 2011."
a response is required within 15 days from the date of the letter, it
should be noted that the letter is not a specific notice to
administrators that their filings are delinquent. As such, sponsors
discovering any delinquent welfare benefit plan filings may take
advantage of the DOL’s Delinquent Filer Program (DFVCP). See http://www.dol.gov/ebsa/calculator/dfvcpmain.html
OCA is determined to get 100% response, so it’s important to reply
promptly. It should be noted the letter is directed to the email
address of the "signer" of the 2011 Form 5500 on the EFAST2 system;
therefore, practitioners who file on behalf of the plan administrator
may receive the notice instead of the affected plan sponsor.
The IRS Clarifies Form 5558 Instructions
For those of you who routinely monitor the Form 5500 Corner [http://www.irs.gov/retirement/article/0,,id=117588,00.html]
on the IRS web site, this may be old news. On May 3, 2012, IRS posted
new information about Form 5558, while a video posted January 17, 2012
explains how to complete the filing when reporting multiple plans on a
single Form 5558.
Here is a recap of the issues IRS wants you to consider.
No Lists, Please
5558 must be filed by the sponsor of each plan requesting an extension
of time to file Form 5500 series, Form 8955-SSA or Form 5330. While IRS
had permitted filers to attach a list of the single employer’s plans to
Form 5558 in the past, when the most recent Form 5558 was released in
July 2011, the instructions specifically eliminated this option. The
current form provides three lines for listing plan name, number and
year ending and no attachments are permitted.
The latest information on the Form 5500 Corner
advises filers that lists attached to Form 5558 received through July
31, 2012 will result in those submissions being returned to the filer,
who will be required to properly complete Form 5558 and resubmit Form
5558 for all plans requiring an extension of time to file. Apparently,
some filers have been incorrectly submitting a single Form 5558 with a
laundry list of unrelated plans for which an extension of time to file
was being requested.
Any Form 5558 that includes a list that is received by IRS after July 31, 2012 will not be returned and will not be processed.
the request to extend the time to file is automatically granted with
respect to Form 5500 series returns and Form 8955-SSA, this is only
true if Form 5558 is properly completed and, with regard to Form
8955-SSA, properly signed.
firms prepare Form 5558 for all of their clients at the same time and
send them to IRS in a single package. For control purposes, these
filers include a cover sheet that lists each plan / plan sponsor shown
on the Form 5558 that are included with the batch.
has confirmed that such cover sheets are acceptable, although it’s
unlikely that IRS is comparing the list to the contents of the package.
IRS focuses on processing the individual Forms 5558 that are submitted.
Any cover letter submitted with Form 5558 filings cannot serve as a
part of the request for extension of time to file.
As a reminder, the overnight service address is 1973 Rulon White Boulevard, Ogden, UT 84201-1000.
Who May Sign Form 5558
Signatures are required on any Form 5558 submitted to extend the due date to file Form 5330 or Form 8955-SSA. Per the Form 5500 Reminders [http://www.irs.gov/retirement/article/0,,id=249377,00.html] page, the Form 5558 must be signed by a:
- Plan Administrator, employer, or plan sponsor, or
- An individual or authorized representative permitted to sign the Form 5330 (or Form 8955-SSA).
the persons who could be authorized to sign the Form 5330 or Form
8955-SSA include so-called Circular 230 preparers, which includes
attorneys, CPAs, enrolled agents, enrolled actuaries, and ERPAs.
Generally, unenrolled preparers may not be authorized to sign Form 5330
or Form 8955-SSA. It should be noted that a Power of Attorney (Form
2848) would not be required merely to authorize signature of Form 5558
on behalf of the plan sponsor.
Government Affairs Committee sent a letter to IRS on November 21, 2011
requesting the elimination of the signature requirement when filing
Form 5558 to extend the due date for filing Form 8955-SSA. To date, IRS
has not issued any official response; however, while speaking at the
recent AICPA Employee Benefits Conference in Atlanta, Monika Templeman
(IRS Director of EP Examinations) reportedly stated that the IRS
expects to release a proposed regulation that would eliminate the
requirement for a plan administrator's signature on Form 5558 for
extending the filing deadline for Form 8955-SSA. Until such guidance is
official, filers should be aware that a signature is necessary.
Other Common Errors
IRS posted a list of errors that potentially invalidate a Form 5558 in its Retirement News for Employers - Winter 2012 -- Form 5558 [http://www.irs.gov/retirement/article/0,,id=253983,00.html]. Quoting from the IRS web site, the publication provided the following explanation:
possible that the information on your extension application didn’t
match your Form 5500-series return (Form 5500, 5500-SF or 5500-EZ),
Form 5330 or Form 8955-SSA. For example,
Mismatched plan sponsor or administrator name -- The plan sponsor or
plan administrator listed on Form 5558, Part 1, Block A didn’t match
the name listed on the Form 5500-series return. The names must be
1. Example – abbreviation: Form 5500 shows “Dana Kay Inc.” as the plan
sponsor, while Form 5558 shows “DK Inc.” as the plan sponsor.
2. Example – common variation: Form 5500-SF shows “Hawk Inc.” as
the plan sponsor, while Form 5558 shows “The Hawk.”
3. Example – different entity: Form 5500-EZ shows “Alvin Cooke P.C.” as
the plan sponsor, while the Form 5558 shows “Alvin Cooke.”
• Mismatched EIN, plan year-end or plan number -- The employer
identification number, Social Security number, plan year-end, or
3-digit plan number on Form 5558 didn’t match the ones used on your
5500-series return. Always use the EIN assigned to the plan sponsor for
the Form 5500-series return. If you don’t have an EIN, you can apply
for one over the phone or online.
• Mismatched plan name -- The name you entered in Form 5558, Part 1,
Block C didn’t match the name used on your Form 5500-series return.
- Sponsors of multiple plans
If you sponsor more than one plan, make sure the plan name and number
on the Form 5558 match the plan name and number on the Form 5500-series
return for that plan. This is especially important if you have recently
merged one plan into another or changed your plan’s name.
- Always use the current version of the form
that you are using the most current version of any IRS form. The
Retirement Plan Forms and Publications Web page has the latest version
of forms, including the fillable versions if available.
We Can Dream....
we have become comfortable with the electronic efficiencies of EFAST2
and FIRE, many filers / preparers would prefer an electronic option for
filing Form 5558. With limited resources and recurring budget
constraints, however, IRS can only share that fantasy for the time
The IRS Updates FAQs on
noted in my last posting, IRS has issued both the 2009 and 2010 Form
8955-SSA but indicates that it intends the following rules will apply:
- A filer that has used the 2009 Form 8955-SSA to report both 2009 and 2010 data need not file again using the 2010 form.
- Filers may still use the 2009 form to report combined 2009 and 2010 data.
only 2010 data is being reported, then the 2010 form should be used to
report that data or to provide additional data for 2010 that has not
previously been reported; however, a 2009 form used to report only 2010
data will not be rejected.
Even though the PY 2010 Form 8955-SSA is available to the public, can I
still combine PY 2009 and PY 2010 data on the PY 2009 Form 8955-SSA?
plan administrators can continue to use the PY 2009 form for the
combined 2009 and 2010 data even though the 2010 form has been
released. As stated in the Instructions to the 2009 Form 8955-SSA, plan
administrators may use a PY 2009 form to report information for the
2010 plan year, or combine the information for the 2009 and 2010 plan
years on a single PY 2009 form. The release of the 2010 form does not
affect this rule.
If you file one
Form 8955-SSA covering both 2009 and 2010 reportable employees, the
2010 reportable employees are treated as reported in 2009. Enter the
beginning and ending date for the 2009 plan year on the Form 8955-SSA
when combining information for the 2009 and 2010 plan years. For
example, a plan that reports on a calendar year basis and combines
information for the 2009 and 2010 plan years should enter January 1,
2009 as the beginning date and December 31, 2009 as the ending date.
November 18, 2011, the IRS further updated its FAQ regarding filing
Form 5558 to extend the due date for filing Form 8955-SSA, as follows:
Can the January 17, 2012 deadline for filing 2009 Form 8955-SSA be extended by filing a Form 5558?
Ordinarily, the rules applicable to the extension of time for filing
Form 8955-SSA are the same as those applicable to the extension of time
for filing Schedule SSA (Form 5500). Thus, Form 5558, Application for
Extension of Time To File Certain Employee Plan Returns, may generally
be used to file for a one-time extension of time of up to 2 1/2 months
after the normal due date. However, because of the special extended
filing date for the 2009 and 2010 Form 8955-SSA, this automatic
extension is not available for filings due on January 17, 2012. A Form
5558 may be filed, however, if the due date for filing the Form
8955-SSA (with or without extension) falls after January 17, 2012.
on November 18, 2011 the IRS added FAQs to address questions raised by
403(b) plan filers, given that these plans have not previously reported
information to SSA. Here are the two FAQs:
403(b) FAQ #1
Does the Form 8955-SSA filed for 2009 by a 403(b) plan sponsor have to
report participants who separated from service prior to 2008 with a
deferred vested benefit under the plan?
no. Form 8955-SSA filed for 2009 generally only has to report
participants who separated from service in 2008. Thus, participants
with a 403(b) contract or account who separated from service prior to
2008 are not required to be reported on the Form 8955-SSA filed for
2009 (or for any subsequent year).
a participant should be reported on the Form 8955-SSA filed for 2009 if
that participant separated from service in a year before 2008 and began
receiving payments under the contract or account, but the payments
stopped in 2008 before all of the participant’s benefits were paid. See
the Instructions for 2009 Form 8955-SSA. See also Question and Answer 2
for an exception that applies even in the case where payments stopped
403(b) FAQ #2
Does a 403(b) plan sponsor have to report all participants who
separated from service after 2007 with a deferred vested benefit under
A plan sponsor is not required to report a separated participant if the
participant’s deferred vested benefits are attributable to an annuity
contract or custodial account that is not required to be treated as
part of the section 403(b) plan assets for purposes of the reporting
requirements of ERISA Title I, as set forth in DOL Field Assistance
Bulletin (FAB) 2009-02.
exception to apply, (1) the contract or account would have to have been
issued to a current or former employee before January 1, 2009, (2) the
employer would have ceased having any obligation to make contributions
(including employee salary reduction contributions), and in fact ceased
making contributions to the contract or account before January 1, 2009,
(3) all of the rights and benefits under the contract or account would
be legally enforceable against the issuer or custodian by the
participant without any involvement by the employer, and (4) the
participant would have to be fully vested in the contract or account.
For further information, please see DOL FAB 2009-02, www.dol.gov/ebsa.
EFAST2 Practitioner Filing Authorization and Other Updates
Renew Practitioner-Filer Authorization Annually
On May 13, 2010, the DOL announced an option that permits service
providers to submit Form 5500 series reports on behalf of
clients. While plan administrators and plan sponsors may continue
to obtain signer credentials and execute the Form 5500 or Form 5500-SF
signing ceremony either through I-FILE or their service provider’s
software, many practitioners found this option a simpler way to manage
the filing process.
The practitioner filing option is described in FAQ 33a [see http://www.dol.gov/ebsa/faqs/faq-EFAST2.html],
which has been updated to reflect the modifications recently made
to the public disclosure web site. Although not specifically
mentioned in the FAQ, the DOL’s Help Desk advises that the plan
administrator must provide written authorization to the service
provider on a year-by-year basis and cannot simply sign an open-ended,
or evergreen, authorization. [click here]
is acceptable to reference more than one plan in an authorization; for
example, when an employer offers both pension and welfare benefit plans
that require a Form 5500 filing. However, the authorization may not
cover more than one plan year for such plans.
Other EFAST2 FAQ Updates
On March 31, 2011 the EFAST2 FAQs were updated, as follows:
- FAQs 3 and 9 were removed because they applied only to 2009 plan year filings;
- FAQ 33b was added to explain what happens when the Form 5500 series report is not signed with a valid electronic signature;
1, 2, 4, 8, 10, 11, 18, 23a, 29, 33a, 38 have been modified with
updated language and new links to reflect the current EFAST2 system;
- FAQs 16b-c-d-e have been added to provide information about retrieving forgotten passwords and credentials; and
- FAQ 27a has been added to provide more information about submitting secured attachments.
More information about Form 5500 matters -- including Forms 5558 and 8955-SSA -- will be posted as it becomes available.
Form 8955-SSA — IRS Dribbles Out Information
About Filing of New Form
Form 8955-SSA Replaces Schedule SSA
With the implementation of the fully electronic EFAST2 system beginning
with 2009 plan year filings of Form 5500, the Schedule SSA was
eliminated as the method of reporting to IRS and the Social Security
Administration those participants who had terminated employment and who
had not started receiving benefit payments. Instead, the IRS
created Form 8955-SSA and released the draft form and instructions for
public comment on November 1, 2010. [click here]
previous article on this website described some of the loose ends in
the instructions. Although the form and instructions have been
not finalized as of March 6, 2011, the IRS issued Announcement 2011-21
on March 3, 2011 to describe some of the rules that will surround the
Without the final form and instructions, the information provided in
the release causes many practitioners to have more questions than
answers. Here are a few of the tidbits gleaned from the IRS
IRS will be releasing the 2009 form and instructions in the near
future; however, the 2010 form and instructions will not be available
until later this year.
2009 and 2010 filings are due by the later of (1) the due date that
generally applies for filing Form 8955-SSA for the 2010 plan year, or
(2) August 2, 2011.
administrators will be permitted to report information that would
otherwise be required to be reported on the 2010 Form 8955-SSA using
the 2009 form. What the announcement doesn't indicate is whether
or not a plan may file both the 2009 and 2010 information on a single
2009 Form 8955-SSA.
appears that Form 8955-SSA will be filed only for years for which there
is data to report. Thus, an annual filing may not be required
depending on the facts and circumstances.
IRS has adapted the FIRE [Filing Information Returns Electronically]
system to permit voluntary electronic filing of Form 8955-SSA. Form
4419, Application for Filing Information Returns Electronically,
must be completed to request a specific TCC (Transmitter Control Code)
for purposes of transmitting the Form 8955-SSA data. The FIRE help desk
confirmed that a single TCC may be used for all client plans. IRS forms
and publications may be ordered by calling toll-free at 800-829-3676 or
downloaded from the IRS website at www.irs.gov. Also see http://www.irs.gov/taxtopics/tc802.html
the Form 5558 is being adapted to permit a request for an extension of
time to file Form 8955-SSA, Announcement 2011-21 states that plan
administrators also are granted an automatic extension of time to file
the report until the due date of the federal income tax return of the
employer if certain conditions are satisfied.
No PTIN Required for Form 8955-SSA
On March 4, 2011, IRS updated its FAQs at http://www.irs.gov/taxpros/article/0,,id=218611,00.html to indicate that Form 8955-SSA is not subject to the PTIN rules. The text of the FAQ is as follows:
am a retirement plan administrator who prepares Forms 5500 and the
accompanying schedules for my clients. I also prepare Forms 8955-SSA
and Form 5558 for my clients. While the Form 5500 series returns are
included in the list of forms exempted from the PTIN requirements in
Notice 2011-6, the Forms 8955-SSA and Forms 5558 are not included in
that list. Am I required to obtain a PTIN? (posted 3/4/11)
The Form 8955-SSA, Annual Registration Statement Identifying Separated
Participants With Deferred Vested Participants, and Form 5558,
Application for Extension of Time to File Certain Employee Plan
Returns, are, for purposes of Notice 2011-6, part of the "Form 5500
series" of tax returns inasmuch as these forms are prepared either in
conjunction with the filing of a retirement plan's Form 5500 filing or
to request an extension of time to file a Form 5500 series tax return.
More information about Form 8955-SSA will be posted as it becomes available.
Form 5500 Not Subject to PTIN Rules
Under New IRS Guidance
IRS issued Notice 2011-6 [click here]
to provide additional guidance regarding the implementation of the new
Treasury regulations governing paid tax return preparers. ASPPA and
other organizations representing tax return preparers worked with the
IRS to achieve a more practical application of the PTIN rules.
a result, the IRS has decided to allow persons who are not attorneys,
certified public accountants, enrolled agents, or registered tax return
preparers to obtain a PTIN and prepare, or assist in the preparation
of, all or substantially all of a tax return in certain circumstances.
While the IRS broadly interprets the term tax forms, the Notice also exempts certain forms, many of them employee benefit plan related, from the PTIN requirements.
Forms Not Requiring a PTIN
Section .03 of the Notice specifically exempts the following benefit plan related tax forms from the PTIN requirements:
- Form 1099 series;
- Form 2848, Power of Attorney and Declaration of Representative;
- Form 5300, Application for Determination of Employee Benefit Plan;
- Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans;
- Form 5310, Application for Determination for Terminating Plan;
- Form 5500 series;
- Form 8717 User Fee for Employee Plan Determination, Opinion, and Advisory Letter Request
forms are listed in Section .03 of the Notice, and the IRS may in
future guidance modify the list of documents to which the PTIN rules
Forms Requiring a PTIN
plan practitioners may still need a PTIN, however, because certain tax
forms frequently prepared by benefit plan practitioners require the
insertion of the PTIN and are not included on the exempted list (shown
above). Such forms include:
- Form 945, Annual Return of Withheld Federal Income Tax
- Form 990, Return of Organization Exempt from Income Tax
- Form 990-T, Exempt Organization Business Income Tax Return
- Form 5330, Return of Excise Taxes Related to Employee Benefits Plans
It is unclear whether or how the PTIN rules might apply to Form 5558, Application for Extension of Time to File Certain Employee Benefit Plan Returns,
which has not been updated since 2008. ASPPA anticipates the Form 5558
will be revised after the release of the new Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits;
however, any PTIN requirement associated with Form 5558 is likely to
apply only with regard to a request for an extension of time to file
PTINs for Non-Circular 230 Individuals Require No Testing / Continuing Education
January 1, 2011, all individuals who are compensated for preparing, or
assisting in the preparation of, all or substantially all of a tax
return or claim for refund of tax must have a PTIN.
Circular 230 practitioners.
This PTIN category includes an individual who is already subject to the
rules of Circular 230, including attorneys, CPAs, enrolled agents,
enrolled actuaries, and ERPAs. Such persons may sign tax returns
and continue to be subject to professional conduct, ethics, and
continuing education rules.
Non-Circular 230 practitioners. Many
preparers will most likely benefit from the IRS’s decision to issue
PTINs and not require competency exams covering tax returns and claims
for refunds not prepared by the individual (e.g., the Form 1040
series). However, the application process will require such an
individual to certify that he or she does not prepare, or assist in the
preparation of, all or substantially all of any tax return or claim for
refund covered by the competency exams for registered tax return
preparers administered by IRS (Form 1040 series until further notice)
and the individual must pass the requisite tax compliance check and
suitability check (when available). Currently, there is no
continuing education requirement for these PTIN holders; however, such
persons are subject to the duties and restrictions relating to practice
in subpart B of Circular 230 (Duties and Restrictions Relating to Practice Before the Internal Revenue Service).
IRS does not expect to offer any competency examination before mid-2011
and then only to those who prepare Form 1040 series returns. Tax
preparers who are not attorneys, CPAs, or enrolled agents will be
allowed to obtain a provisional PTIN and continue to prepare and sign
tax returns or claims for refund until the appropriate competency exam
Theadditional PTIN guidance issued by IRS is helpful. Benefit
plan consultants and administrators should review their return
preparation practices and identify those individuals who should apply
for a PTIN. This most immediately affects those persons who
prepare Form 945, which is due by January 31, 2011 (or by February 10,
2011 if tax deposits were made on time and in full).
Little Known Code Section Requires Notice to
Participants Reported on Form 8955-SSA
In the November 1, 2010 Federal Register, the IRS published a notice and request for comments on the proposed Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits, which replaces the previous Schedule SSA filed with Form 5500. [click here] for a copy of the Federal Register notice along with a draft (as of 5-24-2010) of the new form and its instructions.
a separate article to be posted soon, I’ll comment on the instructions;
however, line 8 of the new form warrants special discussion.
Line 8: Did the plan administrator provide an individual statement to each participant required to receive a statement?
__ Yes __ No
The requirement isn’t new. In fact, the statute and regulation have
been around since the late 70s! What is new is that it appears
the IRS is going to start enforcing the rule, which has a $50 per
participant price-tag for failures to comply.
IRC §6057(e), effective for plan years beginning after December 31,
1975 and amended for plan years beginning after December 31, 1984 by
adding the final sentence, reads:
(e) INDIVIDUAL STATEMENT TO
PARTICIPANT. Each plan administrator required to file a registration
statement under subsection (a) shall, before the expiration of the time
prescribed for the filing of such registration statement, also furnish
to each participant described in subsection (a)(2)(C) an individual
statement setting forth the information with respect to such
participant required to be contained in such registration
statement. Such statement shall also include a notice to the
participant of any benefits which are forfeitable if the participant
dies before a certain date.
The Regulation. The regulation at §301.6057-1(e), which was finalized in 1978, reads:
(e) Individual statement to participant.
The plan administrator of an employee retirement benefit plan defined
in paragraph (a)(3) of this section must provide each participant with
respect to whom information is required to be filed on Schedule SSA a
statement describing the deferred vested retirement benefit to which
the participant is entitled. The description provided the participant
must include the information filed with respect to the participant on
the Schedule SSA. The statement is to be delivered to the participant
or forwarded to the participant’s last known address no later than the
date on which any Schedule SSA reporting information with respect to
the participant is required to be filed (including any extension of
time for filing granted pursuant to section 6081).
Instructions Proposed for Form 8955-SSA
As previously noted, line 8 of the new form asks the plan sponsor and
plan administrator to verify whether or not such statement has been
provided. The SSA form itself requires reporting of the participant’s
social security number, name (first, middle initial, last), type of
annuity and payment frequency, along with the amount of the
periodic defined benefit payment or value of the participant’s account
as of the date of termination.
Fortunately, the proposed instructions, on page 2, under Prior Year Statement
says that filers need only respond to line 8 with regard to reporting
for 2009 and later plan years. And the 2009 filing of SSA data is
currently delayed until at least August 1, 2011 for 2009 plan years.
Unfortunately, it is unlikely that any current participant statement provides such information.
What To Do?
It’s probably reasonable to assume that IRS will begin enforcing this
disclosure rule and imposing penalties when failures occur. That
means service providers need to pull together a game plan for complying
with the notice requirements.
regulation is silent about what constitutes an acceptable disclosure.
For example, is it necessary to tell the participant they were reported
using Code A or can the statement simply explain they are being added
to the SSA’s records for this deferred benefit? How much explanation
about what SSA does with this information has to be provided to the
The nature of
disclosures to participants has changed considerably since these
regulations were issued in the 70s, including the presentation of
social security numbers in correspondence. Watch for more
discussion of this issue in the benefits community in the coming weeks
and months. More information will be posted here as it becomes