What is Form 5500?
Form 5500 is an annual report containing information about retirement plans, as well as health and welfare plans, provided by employers. Filing requirements for Form 5500 are set under the Employee Retirement Income Security Act (ERISA), and the form is typically submitted to the Department of Labor, the Internal Revenue Service and the Pension Benefit Guaranty Corporation.
The IRS and DOL use Form 5500 to ensure that companies comply with tax laws, ERISA and other regulations designed to protect employee interests.
A 5500 filing includes a variety of details about company-provided plans, including:
- Number of active participants
- Number of retired or separated participants
- Beneficiaries of deceased participants receiving plan benefits
- The plan’s financial condition
- Investments and operations
- Compliance with laws and regulations
- Information about the plan administrator
- Information about fidelity insurance
Which companies are required to file Form 5500?
Offering retirement plans and other benefits can be a vital piece of a competitive compensation strategy, but they also add new accounting responsibilities for employers. A 5500 filing may be required for employers who offer certain types of retirement or benefit plans. Plans covered by ERISA typically need to submit Form 5500, providing federal agencies with information about the plan’s financial condition, operations and compliance.
Types of plans that require a 5500 filing
Not every type of retirement or benefit plan requires a 5500 filing, but many do. Employers offering benefit plans covered by ERISA are almost always required to file. These plans can include:
- Profit-sharing plans
- Stock bonus plans
- 401(k) s
- Some 403(b) plans
- Individual retirement accounts (IRAs) established by the employer under section 408(c)
Some pension benefit plans, such as simplified employee pension (SEP) plans, don’t usually require you to file a form 5500.
You may also need to file form 5500 if your business offers health and welfare plans covered by ERISA, including:
- Medical and dental insurance
- Life insurance
- Scholarship funds
- Severance pay
- Disability benefits
Generally, if your business offers any plan funded through a trust, you’ll have to file. Unfunded plans, such as those paid from the employer’s general assets and plans where premiums are paid directly to an insurer, usually only require a 5500 filing if there are more than 100 participants.
Use the correct form based on the number of participants
Different versions of Form 5500 apply depending on the type and size of a retirement plan.
Larger plans generally file the standard Form 5500, while smaller plans may use the short form, 5500-SF. Plans with only a single participant or a small group of owners and their spouses often use Form 5500-EZ. The type of form filed reflects the plan’s structure and size, helping ensure that reporting is aligned with the plan’s scope.
Required Schedules
Form 5500 filings are often accompanied by additional schedules that provide more detailed information about a plan’s finances, investments and operations.
The specific schedules included can vary depending on the characteristics of the plan. The 5500-series schedules help capture this additional detail, offering a more complete picture of a plan’s structure and activity.
- Schedule A: Insurance Information
- Schedule C: Service Provider Information
- Schedule D: DFE/Participating Plan Information
- Schedule G: Financial Transaction Schedules
- Schedule H: Financial Information
- Schedule I: Financial Information – Small Plan
- Schedule MB: Multiemployer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information
- Schedule R: Retirement Plan Information
- Schedule SB: Single-Employer Defined Benefit Plan Actuarial Information
Fidelity bond requirements and form 5500
Plans typically carry bonds that cover a percentage of plan assets or a set minimum amount, helping protect the plan’s financial integrity. Information about fidelity bonds is generally reported on the appropriate 5500 schedules, offering transparency about this coverage.
What is a summary annual report?
A Summary Annual Report (SAR) provides plan participants with a summary of the information included in Form 5500 and its related schedules. The SAR also outlines participants’ rights to access additional plan information, offering transparency and insight into the plan’s operations and financial status.
How to file form 5500
Form 5500 and related documents must be filed electronically with the DOL using the ERISA Filing Acceptance System II (EFAST2). Some 5500-EZ filers may file a paper form, but they can also use the EFAST2 system. Companies filing a 5500 or 5500-SF must use EFAST2.
How to sign up for an EFAST2 account
Companies need a Department of Labor EFAST account to file 5500 form documents. These accounts are easy to obtain by visiting www.efast.dol.gov and following the instructions. A person authorized to complete Form 5500 on behalf of the company must be the person to sign up for the account.
Who can file 5500 forms and documents?
Many companies, especially larger ones, choose to hire a third-party business to complete these documents. However, the employer maintaining the plan or a plan administrator must review the documents for accuracy and electronically sign and file the 5500 forms.
Tips for completing your 5500 filing
Incomplete or inaccurate 5500 filings can result in rejections or penalties from federal agencies. Certain aspects of the 5500-series forms are frequently cited as areas where errors occur, highlighting the importance of careful reporting and review.
Understand deadlines and required documents
Know when your deadline for filing is, especially if you administer a plan that doesn’t follow the calendar year. Use a calendar or tickler file to make sure you don’t forget the deadline. Using a tickler system can be particularly helpful if your 5500 filing deadline is not the same as other tax filing deadlines.
You’ll also need to understand which documents to submit as part of your filing. Usually, you’ll need to submit some of the 5500-series schedules.
Carefully review forms before filing
Review your forms for accurate reporting of things like:
- EIN
- Plan numbers
- Number of participants
Simple typos can lead to a form not being processed and may result in penalties.
Know how to report information on your Form 5500 correctly
Understanding how to report Form 5500 information can help you avoid errors. Sometimes employers fail to count all plan participants, or the employer may forget to include plan participants who have separated from the company.
Another error is not filing Form 5500 because you consider the plan terminated. The IRS and DOL typically require plan administrators to file Form 5500 until all the plan’s assets have been distributed.
Large companies with multiple plans and participants may benefit from hiring a third-party business, such as an accounting firm or CPA, to assist with 5500 filings. Newer companies and small businesses that may just be learning what Form 5500 is can also benefit from outside assistance.
Due date and extensions for filing
Form 5500 filings are generally submitted through the EFAST2 system and are due by the seventh month after the end of the plan year. For calendar-year plans, this typically falls at the end of July. Extensions can be requested using Form 5558, and timely filing is important to help avoid potential penalties from federal agencies.
Penalties for late 5500 filings
Late or incomplete Form 5500 filings can result in penalties from both the IRS and the Department of Labor (DOL). IRS penalties may be assessed on a daily basis, up to a specified maximum, while DOL penalties can also apply per filing, with different caps depending on plan size. Plan administrators can be held responsible for ensuring filings are submitted accurately and on time.
For more information on filing requirements, penalties and voluntary correction programs, employers can refer to the DOL’s guidance on Form 5500.
