The Department of Labor (DOL) and the Internal Revenue Service (IRS) have joined forces in an effort to reduce costs to employee benefit plans. Annual return/report filings for 2009, with associated schedules and reports, including the annual plan audit, if required, have mandated electronic filing. In conjunction with the required electronic filing, the IRS made some significant changes to the form 5500 and related schedules.
The electronic filing mandate requires the Plan Sponsor/Plan Administrator to register with the DOL at www.EFAST.DOL.GOV. The registration allows the Plan Administrator to electronically sign and submit the completed Form 5500 and schedules. Plan Administrators generally will be required to register with the DOL as a “Filing Signer” and as a “Transmitter.”
The filing deadlines have not changed: midnight in the location of the Plan Administrator on the last day of the seventh month following the end of the plan year (although since the deadline falls on a Saturday this year, August 2, 2010 is the deadline for plans ending December 31, 2009). Any errors on the forms or schedules will be immediately identified in the electronic filing process and will require an amended filing.
The IRS has eliminated, renamed, and revamped the schedules associated with the Form 5500, particularly schedules A and C. Each of these schedules now includes an opportunity to “tell on” the service providers who are uncooperative or unresponsive in providing the information required to complete schedules A and C. Schedule C applies to large plans (generally, at least 100 participants) and requires considerable information regarding compensation, direct and indirect, received by the service providers, not previously required in such detail. The change to schedule C enables the Plan Administrator to be better informed as to the true cost to the plan and better able to compare apples to apples when requesting proposals and comparing services.
Because this is the first year of required electronic filing, compounded with the fact that there are many changes to the forms and schedules, it is even more important for Plan Administrators to carefully review the annual report/return before electronically “signing” and transmitting the returns.
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