What Is Form 5500 and Who Is Required To File It?
Master Form 5500 compliance. This guide clarifies annual reporting requirements for employee benefit plans, from determining eligibility to successful submission.
Form 5500 serves as an annual report for employee benefit plans, providing an overview of their financial health, operations, and compliance with federal regulations. This form is a joint product of the Department of Labor (DOL), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC), designed to meet ERISA and Internal Revenue Code reporting requirements. Its purpose is to ensure transparency and accountability in employee benefit management, safeguarding plan participants and beneficiaries. The information helps agencies monitor trends and enforce compliance.
Identifying the Filing Obligation
Most employee benefit plans covered by ERISA are required to file a Form 5500 annually. This includes a broad range of plans such as 401(k) plans, 403(b) plans, pension plans, profit-sharing plans, and various welfare benefit plans like health, dental, vision, and life insurance plans. The specific version of the Form 5500 series that a plan must file depends on factors such as the number of participants and the plan’s asset value.
For larger plans, Form 5500 is the standard filing. A plan is considered “large” and must file Form 5500 if it has 100 or more participants at the beginning of the plan year. This form requires more detailed financial and operational information compared to its abbreviated counterparts. Smaller plans, those with fewer than 100 participants at the start of the plan year, may be eligible to file Form 5500-SF, the Short Form Annual Return/Report of Small Employee Benefit Plan. Eligibility for the Form 5500-SF also requires that the plan does not hold employer securities, does not have hard-to-value assets, and holds all of its assets in regulated financial institutions.
A distinct filing option, Form 5500-EZ, is available for “one-participant plans” or “owner-only plans.” These are retirement plans that cover only the owner and their spouse, or partners and their spouses, with no other employees. A one-participant plan needs to file Form 5500-EZ only if its total plan assets exceed $250,000 at the end of the plan year. One-participant plans can file Form 5500-EZ electronically through the EFAST2 system, though paper filing with the IRS is still an option if not subject to electronic filing requirements.
Preparing Required Information
Before a Form 5500 can be accurately completed and submitted, plan administrators must gather and compile a substantial amount of specific information. This preparatory phase involves collecting detailed data across several categories that reflect the plan’s operations and financial standing. The main form itself serves as a summary, with various supporting “schedules” providing the granular detail required by the regulatory agencies.
Key financial information includes an accounting of plan assets, liabilities, income, and expenses for the reporting year. This data provides insights into the plan’s financial health and investment performance. Additionally, administrators must collect participant data, such as the total number of participants and beneficiaries, and information pertaining to the types of benefits provided by the plan. Details about service providers, including investment managers, third-party administrators, and other entities that provide services to the plan, must also be compiled.
An important requirement for many plans is the independent qualified public accountant (IQPA) audit. Plans that have 100 or more participants at the beginning of the plan year are considered large plans and are required to include audited financial statements as part of their Form 5500 submission. This audit provides an independent verification of the plan’s financial information, ensuring its accuracy and compliance with generally accepted accounting principles. The audited financial statements are a mandatory component of the Form 5500 package for these larger plans, serving as an important piece of information for regulators and participants.
Submitting Form 5500
Once all necessary information has been gathered and the Form 5500, along with its applicable schedules, is prepared, the next step involves its submission. The standard deadline for filing Form 5500 is the last day of the seventh calendar month following the end of the plan year. For plans operating on a calendar year, this means the form is due by July 31st of the subsequent year.
Should a plan administrator require additional time to complete the filing, an extension can be requested by submitting Form 5558, Application for Extension of Time To File Certain Employee Plan Returns. This form grants an automatic 2.5-month extension, pushing the deadline to October 15th for calendar-year plans. Filing Form 5558 must occur before the original Form 5500 due date to avoid potential penalties.
The filing process for most Form 5500 series returns is exclusively electronic through the ERISA Filing Acceptance System (EFAST2). This system is managed by the Department of Labor and serves as the central portal for receiving and processing these annual reports. To submit electronically, plan administrators or their authorized service providers must register with EFAST2 and obtain necessary credentials. The completed forms and schedules are then uploaded to the system, and filers receive a confirmation of receipt upon successful submission.