Organizations which offer a competitive employee benefits package often discover their ability to effectively recruit new talent and retain current employees improves considerably. However, many organizations find it difficult to manage the administration of their benefits plans in an efficient manner, due to the lack of internal resources required.
The Form 5500 Series can be especially difficult to complete due to the various versions of this document and the strict requirements under Title I and IV of the Internal Revenue Code and Employee Retirement Income Security Act (ERISA). Learn more about Form 5500 and how the experienced consultants at eBen can assist with the preparation and filing of Form 5500.
What Is Form 5500?
The Form 5500 Series is a component of ERISA’s reporting and disclosure framework. These forms are designed to ensure that employee benefits plans are properly managed in accordance with established standards. The forms also help ensure that all beneficiaries, participants and regulators have access to the information they need to stay protected under covered employee benefits plans.
Many different plans are subject to filing Form 5500, such as qualified retirement plans, health and welfare plans that cover more than 100 participants and 403(b) plans subject to ERISA. In addition, Form 5500 must be completed electronically. Form 5500 consists of one form, in addition to six schedules for financials and four schedules for pensions.
The form and its schedules must be filed with the Employee Benefits Security Administration (EBSA) on or before July 31 for calendar-year plans or on or before the last day of the seventh month following the close of the plan year. Employers are subject to stiff penalties for noncompliance and these penalties are adjusted each year to account for inflation.
How to File Form 5500
1. Review Filing Requirements
Before beginning the Form 5500 process, organizations must first determine which version of the form they are required to complete.
- Form 5500 – Form 5500 applies to most private and public sector businesses that provide plans to at least 100 participants. Plan participants may include any eligible employees, whether enrolled or not, in addition to anyone who receives benefits from the plan, such as beneficiaries of the deceased or employees who are separated from the company or retired.
- Form 5500-SF – This is a condensed version of Form 5500 and applies to businesses that sponsor benefits plans with less than 100 participants. Businesses must file Form 5500-SF electronically via the DOL ERISA Filing Acceptance System (EFAST2).
- Form 5500-EZ – Form 5500-EZ is for use with one-participant benefits plans that cover just a business owner and his or her spouse. It does not cover any other employees. Filing is not necessary when total plan assets are less than $250,000. This form can be filed by mail or electronically.
2. Make a Department of Labor Account
Employers who need to file Form 5500 for the first time will need to create an account with the Department of Labor (DOL). This account must be made online on the EFAST2 website and is required to submit Form 5500 through the IRS portal which requires electronic signing credentials.
3. Begin the Filing Process by Filling in Information
After creating an account and logging into EFAST2, employers will be asked to provide basic information about the business and the benefits plan. Information requested includes the plan’s start date, details on provided benefits, the number of plan participants, schedules of the plan, details about the plan administrator and plan funding data.
Some employers may be asked to provide additional information, such as information about insurance contracts, actuary contact information, accountant reports, and schedules concerning assets and liabilities.
4. Review the Form for Inaccuracies
Submitting Form 5500 that contains incorrect or insufficient information could result in a direct rejection or increase a business’s risk of noncompliance. In addition, both the IRS and DOL could impose hefty fines for these inaccuracies, especially when data is falsified.
Before submitting the form, carefully reread all the answers provided and check that the information is in the correct sections. Double-check all names, codes and plan numbers for typos or accidental errors. Finally, preview Form 5500 by clicking on “View PDF” in IFILE.
5. Submit Form 5500 Before the Deadline
Once the form has been completed and checked for accuracy, it can be submitted electronically. It is important to ensure that Form 5500 is submitted by the annual deadline of July 31st. If an extension is needed, employers have the option to request an extension of up to two-and-a-half months, giving them an extended deadline of October 15th to submit the form and all accompanying documents.
Get Started with eBen
Most organizations that have a plan with 100 or more participants must file Form 5500. At eBen, we complete and file this form on behalf of our clients. Count on our team of experienced consultants to save you time, stay in compliance and avoid missed deadlines. To learn more about how we can help you complete and file Form 5500, contact eBen at (910) 518-9338.