Who Is Required to File Form 5500?

The Form 5500 is an annual report filed with the Department of Labor (DOL) and the Internal Revenue Service (IRS) under the Employee Retirement Income Security Act (ERISA). It provides transparency into the operations and financial condition of employee benefit plans. Government agencies use the collected information to monitor plan compliance, and participants use it to understand their benefits.

General Filing Requirements for Employee Benefit Plans

The mandate to file Form 5500 applies to most private-sector employers that offer employee benefit plans governed by ERISA. The requirement is not based on the size of the company but on the existence of specific types of plans, which fall into two main categories.

Pension benefit plans, which provide retirement income, are a category subject to Form 5500 filing. Common examples include 401(k)s, profit-sharing plans, and defined benefit pension plans. These plans all carry a filing requirement.

Welfare benefit plans provide non-retirement benefits, such as medical, dental, or vision care. Other examples include life insurance, disability plans, and accidental death and dismemberment coverage. Employers offering these benefits are sponsoring a welfare plan and may need to file a Form 5500.

Filing Thresholds Based on Plan Size

The number of participants on the first day of the plan year determines if a covered plan must file a Form 5500. Under the “100-participant rule,” plans with 100 or more participants are classified as large plans. Large plans must file the standard Form 5500 annually, which often requires an independent audit of the plan’s financial statements.

For defined contribution retirement plans, the count includes any participant with an account balance, including retired or separated employees and their beneficiaries. For welfare plans, a participant is an employee who is enrolled in the plan. Eligible but non-enrolled employees are not counted.

The “80-120 Participant Rule” offers flexibility for plans with fluctuating participant numbers. A plan that filed as a small plan in the previous year can continue that status as long as it has fewer than 121 participants. A plan that filed as a large plan can continue that status until its participant count drops below 80.

Common Filing Exemptions

Certain plans are exempt from the annual Form 5500 filing requirement. Governmental plans, which cover employees of federal, state, or local governments, are not subject to ERISA and do not have to file. Church plans are also exempt from these reporting obligations.

An exemption exists for small welfare benefit plans with fewer than 100 participants if the plan is either “unfunded” or “fully insured.” Unfunded plans pay benefits from the employer’s general assets. A fully insured plan provides benefits through insurance contracts, with premiums paid by the employer, employee, or both.

An exemption applies to “top-hat plans,” which are maintained for a select group of management or highly compensated employees. If a top-hat plan is unfunded, it is not subject to the annual Form 5500 filing. The plan administrator can instead file a one-time notification letter with the Department of Labor.

Variations of Form 5500

The specific version of Form 5500 required depends on the plan’s size and characteristics. The standard Form 5500 is for large plans with 100 or more participants. This form requires detailed financial information and is often accompanied by schedules and an independent auditor’s report.

For small plans with fewer than 100 participants, the simplified Form 5500-SF (Short Form) is available. It can be used by small plans that meet certain conditions, such as being fully insured or holding assets with a readily determinable fair value. Using the short form reduces the administrative burden for smaller employers.

Form 5500-EZ is designed for “one-participant” retirement plans, which cover only the business owner or partners and their spouses. Filing is only required if the plan’s assets reach $250,000 or more at the end of the plan year. No filing is necessary below this threshold, unless it is the plan’s final year.