DOL Puts Out Form 5500 Advance Copies

Retirement plan advisers get a glimpse of any changes in Form 5500 filing requirements from the newly released advance copies from the Department of Labor.

The Department of Labor’s Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation (PBGC) released advance informational copies of the 2014 Form 5500 annual return/report and related instructions.

Linda Fisher, principal of Linda T. Fisher Form 5500 Consulting in Chicago, and a self-professed Form 5500 enthusiast, says plan sponsors will welcome one change. The Department of Labor (DOL) used to require an attachment for all companies filing a Form 5500, whether or not they used a multiple employer welfare arrangement (MEWA). “Even though the majority of plans did not, the requirement was there to have the form, and it created a lot of extra work for people,” Fisher tells PLANADVISER. “Now, you don’t need the attachment.” The MEWA Form M-1 compliance information that was filed as an attachment for 2013 now appears as three new questions on the Form 5500, the DOL says.

A heads up for those in charge of actually submitting the form, Fisher says, is an updated caution on the signature and date portion that warns filers to check the filing status. “Make sure your filing is accepted,” she explains. What’s behind the change, she thinks is that some signers don’t realize there is a problem with their credentials or user ID and password. Screen warnings to be on the lookout for are “processing stopped” or “unprocessable,” and Fisher says the submission may not have had a valid electronic signature. Depending on the error, the form may be considered un-filed.

Filers are now required to provide the total number of active participants at the beginning of the plan year and at the end of the plan year on both Form 5500 and 5500-SF, a new requirement, Fisher says. “It used to ask how many at the end of the year and then a beginning count,” she says, explaining that the count for the beginning of the year must now have a subset of active participants.

New for 2014 filings, Form 5500 and Form 5500-SF now require a new attachment from multiple-employer pension plans and multiple-employer welfare plans. “It does not affect as many people,” Fisher says. “If you are a multiple-employer plan, you check the box at the top of page 1 as you always did, but now you need to have an attachment.” Fisher explains that the form has just three questions, but one is critical: sponsors must list the participating employers, their EIN and report the percentage of the contributions that each employer contributes to the plan. “So your financials have to be in order to provide that percentage of contributions,” she says. 

According to the DOL, the requirement is part of the Cooperative and Small Employer Charity Pension Flexibility Act. In the DOL’s language, the percentage is “a good faith estimate of each employer’s percentage of the total contributions during the year.”

At last, Fisher says, the instructions on Schedule H, line 1c(13) now give a definition for “registered investment company registered under the Investment Company Act of 1940.” The form is the same, Fisher says, but the words “mutual funds” are finally used to describe what investment companies do. She says she is unsure why this was never included previously. “It’s not a major change,” she says. “But the majority of plans invest in mutual funds, so if you’re a new plan sponsor it might have been confusing (without this definition).”

More changes are:

Schedule MB: New Line 4f requires plans in critical status to indicate the plan year in which a plan is projected to emerge from critical status or, if the rehabilitation plan is based on forestalling possible insolvency, the plan year in which insolvency is expected.

Terminated Participant Vesting Information: Form 5500-SF filers now must provide the number of participants that terminated employment during the plan year with accrued benefits that were not fully vested.

Schedule SB: Line 3 has been modified so that the funding target is reported separately for each type of participant (active, retired, or terminated vested). Line 11b has been split into two parts: the calculation based on the prior year’s effective interest rate, and the calculation based on the prior year’s actual return. Line 15 instructions have been expanded to address situations in which the AFTAP was not certified for the plan year. Line 27 and related instructions have been modified to reflect funding changes under the CSEC Act for defined benefit pension plans impacted by the act.

Pension and welfare benefit plans that are required to electronically file an annual return/report regarding their financial conditions, investments and operations generally satisfy that requirement by filing the Form 5500 or Form 5500-SF and any required attachments.

These advance copies are for informational purposes only and cannot be used to file an annual return/report.

Informational copies of the forms, schedules and instructions are available online at Filers should monitor the EFAST website for the availability of the official electronic versions for filing using EFAST-approved software or directly through the EFAST website. Assistance with the EFAST2 system is available at or by calling 1-866-463-3278.

The online filing system is available at Technical assistance for the online filing system is available by calling 202-693-8600. Information about the Form M-1 and how to fill it out is available on the site or by calling 202-693-8360.