Form 5500's

The Form 5500 Annual/Report is used to report information concerning employee benefit plans and fringe benefit plans. Almost all retirement plans are required to file the Form 5500 and all cafeteria plans are required to file a Form 5500 regardless of their size.

Welfare benefit plans usually are only required to file a Form 5500 if they have more than 100 participants.

The Internal Revenue Service (IRS), Department of Labor (DOL), and Pension Benefit Guarantee Corporation (PBGC) have consolidated their returns and report forms to reduce the burden for plan administrators and employers. The requirements for completing the form 5500 vary according to the type of plan or arrangement. All required forms, schedules, and attachments must be filed by the last day of the 7th month after the end of the plan year. An extension of time may be granted under certain circumstances.

Assessments for penalties may be imposed for not giving complete information and for not filing returns/reports by their due date unless it is determined that the explanation for failure to file properly is for reasonable cause. Penalties generally consist of fines based on the number of days that a report was delinquent but it may also result in imprisonment if the violations are found to be fraudulent or willful. A penalty of up to $1,100 a day can be imposed for each day a plan administrator fails or refuses to file a complete report.

The most common failure is when plans cross over the 100 participant mark. Many times plan administrators are not aware that they are responsible for additional filings or if they are aware, they are not tracking the number of participants and therefore don't realize that they increased to more than 100. Be sure to review your reporting needs with your benefits administrator and/or your tax counsel to avoid 5500 problems.

Contact BusinessPlans if you would like a signature ready Form 5500 prepared for your company.