Pension and welfare benefit plans must generally file the Form 5500, Annual Return/Report of Employee Benefit Plan, to report their financial condition, investments and operations.
The IRS, Department of Labor, and Pension Benefit Guaranty Corporation jointly developed the Form 5500-series returns for employee benefit plans to satisfy annual reporting requirements under ERISA and the Internal Revenue Code.
Plan sponsors must generally file the return on the last day of the seventh month after their plan year ends (if that due date falls on a Saturday, Sunday or Federal holiday, then it may be filed on the next business day).
Effective January 1, 2010, all Form 5500 Annual Returns/Reports of Employee Benefit Plan and all Form 5500-SF Short Form Annual Returns/Reports of Small Employee Benefit Plan and any required schedules and attachments, must be completed and filed electronically using EFAST2-appoved third-party software or using IFILE.
The Department of Labor, Internal Revenue Service, and the Pension Benefit Guaranty Corporation jointly developed the Form 5500 Series so employee benefit plans could utilize the Form 5500 Series forms to satisfy annual reporting requirements under Title I and Title IV of ERISA and under the Internal Revenue Code.
The Form 5500 Series is an important compliance, research, and disclosure tool for the Department of Labor, a disclosure document for plan participants and beneficiaries, and a source of information and data for use by other Federal agencies, Congress, and the private sector in assessing employee benefit, tax, and economic trends and policies. The Form 5500 Series is part of ERISA's overall reporting and disclosure framework, which is intended to assure that employee benefit plans are operated and managed in accordance with certain prescribed standards and that participants and beneficiaries, as well as regulators, are provided or have access to sufficient information to protect the rights and benefits of participants and beneficiaries under employee benefit plans.
The Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan, is a simplified annual Small Employee Benefit Plan, is a simplified annual benefit plans. To be eligible to use Form 5500-SF, the plan must:
Plans required to file an annual return/report that are not eligible to file the Form 5500-SF, must file a Form 5500, Annual Return/Report of Employee Benefit Plan, with all required schedules and attachments (Form 5500), or Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan.
All pension benefit plans and welfare benefit plans covered by ERISA must file a Form 5500 or Form 5500-SF for a plan year unless they are eligible for a filing exemption. (See Code sections 6058 and 6059 and ERISA sections 104 and 4065). An annual return/report must be filed even if the plan is not “tax qualified,” benefits no longer accrue, contributions were not made during this plan year, or contributions are no longer made. Pension benefit plans required to file include both defined benefit plans and defined contribution plans. Profit sharing plans, stock bonus plans, money purchase plans, 401(k) plans, Code section 403(b) plans covered by Title I of ERISA, and IRA plans established by an employer are among the pension benefit plans for which an annual return/report must be filed. Welfare benefit plans provide benefits such as medical, dental, life insurance, apprenticeship and training, scholarship funds, severance pay, disability, etc. Plans that cover residents of Puerto Rico, the U.S. Virgin Islands, Guam, Wake Island, or American Samoa also must file unless they are eligible for a filing exemption.
If your plan is required to file an annual return/report, you may file the Form 5500-SF instead of the Form 5500 only if you meet all of the eligibility conditions listed below.
1. The plan
(a) covered fewer than 100 participants at the beginning of the plan year 2009, or
(b) under 29 CFR 2520.103-1
(c) was eligible to and filed as a small plan for plan year 2008 and did not cover more than 120 participants at the beginning of plan year 2009 (see instructions for line 5 on counting the number of participants);
Note. If a Code section 403(b) plan would have been eligible to file as a small plan under 29 CFR 2520.103-1(d) in 2008 (that is, the plan was eligible to file in the previous year under the small plans requirements and has a participant count of less than 121 at the beginning of the 2009 plan year), then it can rely on 29 CFR 2520.103-1(d) to file as a small plan for the 2009 plan year.
For more information about annual return/report filings for Code section 403(b) plans covered by Title I of ERISA, see Field Assistance Bulletin 2009-02, available on the DOL website at www.dol.gov.
2. The plan did not hold any employer securities at any time during the plan year;
3. At all times during the plan year, the plan was 100% invested in certain secure, easy to value assets that meet the definition of “eligible plan assets” (see the instructions for line 6a), such as mutual fund shares, investment contracts with insurance companies and banks valued at least annually, publicly traded securities held by a registered broker dealer, cash and cash equivalents, and plan loans to participants;
4. The plan is eligible for the waiver of the annual examination and report of an independent qualified public accountant (IQPA) under 29 CFR 2520.104-46 (but not by reason of enhanced bonding), which requirement includes, among others, giving certain disclosures and supporting documents to participants and beneficiaries regarding the plan’s investments (see instructions for line 6b);
5. The plan is not a multiemployer plan.
Under regulations and applicable guidance, some pension benefit plans and many welfare benefit plans with fewer than 100 participants are exempt from filing an annual return/report. Do not file a Form 5500-SF for an employee benefit plan that is any of the following:
1. An unfunded excess benefit plan.
2. A pension benefit plan maintained outside the United States primarily for the benefit of persons substantially all of whom are nonresident aliens
3. An annuity or custodial account arrangement under Code section 403(b)(1) or (7) not established or maintained by an employer as described in DOL Regulations 29 CFR 2510.3- 2(f).
4. A simplified employee pension (SEP) described in Code section 408(k) that conforms to the alternative method of compliance described in 29 CFR 2520.104-48 or 29 CFR 104-49. A SEP is a pension plan that meets certain minimum qualifications regarding eligibility and employer contributions.
5. A Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) that involves SIMPLE IRAs under Code section 408(p).
6. A church pension benefit plan not electing coverage under Code section 410(d).
7. An unfunded dues financed pension benefit plan that meets the alternative method of compliance provided by 29 CFR 2520.104-27.
8. An individual retirement account or annuity not considered a pension plan under 29 CFR 2510.3-2(d).
9. “One-participant plans,” as defined on page 6, that have assets (either alone or in combination with one or more one-participant plans maintained by the employer) of $250,000 or less at the end of the plan year. (However, in any case, you must file for the final plan year to indicate that all assets have been distributed.)
10. A governmental plan.
11. An unfunded pension benefit plan or an unfunded or insured welfare benefit plan: (a) whose benefits go only to a select group of management or highly compensated employees, and (b) which meets the terms of 29 CFR 2520.104-23 (including the requirement that a registration statement be timely filed with DOL) or 29 CFR 2520.104-24.
12. A welfare benefit plan that covers fewer than 100 participants as of the beginning of the plan year and is unfunded, fully insured, or a combination of insured and unfunded. For this purpose:
a. An unfunded welfare benefit plan has its benefits paid as needed directly from the general assets of the employer or the employee organization that sponsors the plan.
Note. Plans that are NOT unfunded include those plans that received employee (or former employee) contributions during the plan year and/or used a trust or separately maintained fund (including a Code section 501(c)(9) trust) to hold plan assets or act as a conduit for the transfer of plan assets during the plan year.
A welfare benefit plan with employee contributions that is associated with a cafeteria plan under Code section 125 may be treated for annual reporting purposes as an unfunded welfare benefit plan if it meets the requirements of DOL Technical Release 92-01, 57 Fed. Reg. 23272 (June 2, 1992) and 58 Fed. Reg. 45359 (Aug. 27, 1993). The mere receipt of COBRA contributions or other after-tax participant contributions (e.g., retiree contributions) by a cafeteria plan would not by itself affect the availability of the relief provided for cafeteria plans that otherwise meet the requirements of DOL Technical Release 92-01. See 61 Fed. Reg. 41220, 41222-23 (Aug. 7, 1996).
b. A fully insured welfare benefit plan has its benefits provided exclusively through insurance contracts or policies, the premiums of which must be paid directly to the insurance carrier by the employer or employee organization from its general assets or partly from its general assets and partly from contributions by its employees or members (which the employer or employee organization forwards within 3 months of receipt). The insurance contracts or policies discussed above must be issued by an insurance company or similar organization (such as Blue Cross Blue Shield or a health maintenance organization) that is qualified to do business in any state.
c. A combination unfunded/insured welfare benefit plan has its benefits provided partially as an unfunded plan and partially as a fully insured plan. An example of such a plan is a welfare benefit plan that provides medical benefits as in “a” above and life insurance benefits as in “b” above. See 29 CFR 2520.104-20 and the DOL Technical Release 92-01.
Note. A voluntary employees’ beneficiary association, as used in Code section 501(c)(9), (VEBA) should not be confused with the employer or employee organization that sponsors the plan. See ERISA section 3(4).
13. Plans maintained only to comply with workers’ compensation, unemployment compensation, or disability insurance laws.
14. A welfare benefit plan maintained outside the United States primarily for persons substantially all of whom are nonresident aliens.
15. A church welfare benefit plan under ERISA section 3(33).
16. An unfunded dues financed welfare benefit plan that meets the alternative method of compliance provided by 29 CFR 2520.104-26.
17. A welfare benefit plan that participates in a group insurance arrangement that files a return/report on its behalf under 29 CFR 2520.104-43. A group insurance arrangement generally is an arrangement that provides benefits to the employees of two or more unaffiliated employers (not in connection with a multiemployer plan or a collectively bargained multiple-employer plan), fully insures one or more welfare benefit plans of each participating employer, uses a trust (or other entity such as a trade association) as the holder of the insurance contracts, and uses a trust as the conduit for payment of premiums to the insurance company.
18. An apprenticeship or training plan meeting all of the conditions specified in 29 CFR 2520.104-22.
Plans required to file an annual return/report that meet all of the conditions for filing the Form 5500-SF may complete and file the Form 5500-SF in accordance with its instructions.
Single-employer defined benefit pension plans using the Form 5500-SF must also file the Schedule SB (Form 5500), Single-Employer Defined Benefit Plan Actuarial Information, and its required attachments. Money purchase plans amortizing a funding waiver using the Form 5500-SF must also file the Schedule MB (Form 5500), Multiemployer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information, and its required attachments. No other schedules or attachments have to be filed with the Form 500-SF
File the 2010 Form 5500-SF for plan years that began in 2010. The form, and any required schedules and attachments, must be filed by the last day of the 7th calendar month after the end of the plan year (not to exceed 12 months in length) that began in 2009.
Short Years. For a plan year of less than 12 months (short plan year), file the form and applicable schedules by the last day of the 7th calendar month after the short plan year ends or by the extended due date, if filing under an authorized extension of time. Fill in the short plan year beginning and ending dates in the space provided and check the appropriate box in Part I, line B, of the Form 5500-SF. For purposes of this return/report, a short plan year ends on the date of the change in accounting period or upon the complete distribution of assets of the plan. Also see the complete distribution of assets of the plan. Also see the instructions for Final Return/Report to determine if “the final return/report” box in line B should be checked.
Note. If the filing due date falls on a Saturday, Sunday, or federal holiday, the return/report may be filed on the next day that is not a Saturday, Sunday, or federal holiday.
2010 Short Plan Year Filings. Short 2010 plan year filers whose due date to submit their 2010 filing is before January 1, 2011, are given an extended due date to electronically file their complete Form 5500-SF within 90 days after the 2010 filing system is available on the DOL website. The purpose of this extended due date was to encourage such short plan year filers to file electronically under the new EFAST2 filing system. Short plan year filers that did not choose to wait and file under the EFAST2 system should have filed their 2009 annual return/report by the due date under the current EFAST system using the 2008 forms. Short plan year filers whose due date to submit their 2009 filings was before January 1, 2010, and who took advantage of the extended due date to file electronically, must submit their complete Form 5500-SF with EFAST2 within 90 days after the 2009 filing system is available on the DOL website, and fill in the short plan year beginning and ending dates in the space provided and check the appropriate box in Part I, line C, of the Form 5500-SF to indicate they are filing under an extended due date.
Caution: 2011 short plan year filers may not use the 2010 forms for filing. They must use the 2011 forms, schedules, and instructions.
Using Form 5558
If filing under an extension of time based on the filing of an IRS Form 5558, Application for Extension of Time To File Certain Employee Plan Returns, check the appropriate box on the Form 5500-SF, Part I, line C. A one-time extension of time to file the Form 5500-SF (up to 21/2 months) may be obtained by filing Form 5558 on or before the normal due date (not including any extensions) of the return/report.
You must file the Form 5558 with:
Department of Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027.
Approved copies of the Form 5558 will not be returned to the filer. A copy of the completed extension request must be retained with the plan’s records.
A “one-participant plan” is:
(1) a pension benefit plan that covers only an individual or an individual and his or her spouse who wholly own a trade or business, whether incorporated or unincorporated;
(2) a pension benefit plan for a partnership that covers only the partners or the partners and the partners’ spouses. Thus, a “one-participant plan” can cover more than one participant. On the other hand, merely covering only one participant does not make you eligible to file as a “one-participant plan” unless you are one of the types of plans described above.
The Form 5500-EZ generally is used by one-participant plans that are not subject to the requirements of section 104(a) of ERISA to satisfy certain annual reporting and filing obligations imposed by the Code. One-participant plans that meet the Conditions for Filing below may file the Form 5500-SF electronically in place of a Form 5500-EZ (on paper) to satisfy the filing obligations under the Code.
One-participant plans that file the Form 5500-SF electronically complete only certain questions on the Form 5500-SF. These are the questions that would be completed if the filer filed Form 5500-EZ on paper. For more information on filing with the IRS, go to www.irs.gov or call 1-877-829-5500.
Note. A Form 5500-SF may be filed for one-participant plans that are either defined contribution plans (which include profit-sharing and money purchase pension plans, but not an ESOP or stock bonus plan) or defined benefit plans.
Note. Information filed on Form 5500-EZ is required to be made available to the public. Form 5500-SF is open to public inspection and the contents are public information subject to publication on the Internet.
Conditions for Filing.
One-participant plan filers that meet the following conditions are eligible to file a Form 5500-SF.
1. The plan is a “one-participant plan.” This means either:
a. The plan only covers you (or you and your spouse) and you (or you and your spouse) own the entire business (which may be incorporated or unincorporated)
b. The plan only covers one or more partners (or partner(s) and spouse(s)) in a business partnership.
2. The plan does not provide benefits for anyone except you, or you and your spouse, or one or more partners and their spouses.
3. The plan covered fewer than 100 participants at the beginning of the plan year.
If you do not meet ALL the conditions listed above, you are not a one-participant plan filer who is eligible to file Form 5500-SF instead of Form 5500-EZ. You must file a paper Form 5500-EZ with the IRS if you meet the first two conditions but do not meet the third condition.
Eligible one-participant plans need complete only the following questions on the Form 5500-SF:
- Part I, lines A, B, and C;
- Part II, lines 1a–5b;
- Part III, lines 7a–c, and 8a;
- Part IV, line 9a;
- Part V, line 10g; and
- Part VI, lines 11–12e