The Form 5500, sometimes called an “Annual Return,” is a required tax filing each year that provides financial and operational information about retirement plans to the DOL and IRS government entities. Just like an individual files an annual tax return, a retirement plan does too, and it’s part of our standard services to prepare and file this for you if we act as the plan administrator for your plan. In this article, we’ll break it down into a bit more detail about what is required to be reported on the Form 5500, the information we need from you to do so, and the deadlines for providing us with that required information.
What is reported on the Form 5500?
The purpose of the Form 5500 is to report on the plan’s financial condition, investment options available to participants, and various operational matters. To that end, the form states the plan’s employee and employer contributions, gains and losses, participant withdrawals, participant count, and similar information for the plan year. To streamline the process of compiling the required information, we obtain as much of it as we can from your payroll files and other records in our systems. However, some of the information that we are required to report can only come from you, the plan sponsor. Beginning in January of each year, we send all plan sponsors a questionnaire so that we can collect that information.
What are the questions asked on the Form 5500?
As referenced above, the IRS and DOL incorporate questions of their own near the end of the tax filing to get a better sense of the plan's operations. All of these questions are generally regarding the compliance of the plan. An example of some of the questions that are asked are: what is the fidelity bond amount? Were there any fraudulent transactions? or Were there any participant loans? All of these questions are closely looked at when the Form 5500 is filed.
When is the Form 5500 due?
The Form 5500 is due seven months after the end of the plan year and can be extended for an additional two and a half months by requesting an extension via the Form 5558. For plans that follow a calendar year, this means that the initial filing deadline is July 31, which can be extended until October 15.
Missing the filing deadline is a serious issue. The Department of Labor and Internal Revenue Service each impose potentially significant penalties for late or missed filings: up to $150,000 for the DOL and an additional $50,000 penalty imposed by the IRS. We try our best to help you avoid any regulatory penalties by sending you repeated reminders along the way if you do not return your questionnaire to us on time. This is among the reasons why our services agreement requires your cooperation with our year-end information gathering process. If we do not receive the questionnaire in time, we will still file the Form 5500 prior to the deadline based on any data available to us in our systems which may be incomplete or inaccurate.
Where can I find my Form 5500 or Form 5558?
If your plan is supported on our platform with us as plan administrator and recordkeeper, we will prepare, sign, and file the Form 5500 for your plan based on the information you provided to us on your year-end questionnaire. If your plan uses us for recordkeeping services only, in an unbundled capacity, your plan’s Third Party Administrator handles those activities.
To find a Form 5500 or 5558 extension filed by us:
- Login to your employer portal.
- Navigate to the "My Plan" tab.
- Click on the "Documents" tab.
- Scroll to the "Plan Filings" section where you will find any government filings we submitted for your plan.
To find a Form 5500 filed by a prior provider before your plan transitioned to our platform, please reach out to your prior recordkeeper or TPA. Alternatively, you can search the DOL’s public database here. We recommend searching by your company’s EIN in most cases.
I received a letter from the IRS regarding an extension Form 5558 that was filed for my Form 5500.
This is a standard letter from the IRS and there is nothing to be alarmed about. Form 5558 is the form that we file with the IRS to request an extension. To give our clients more time to compile the information that we need to file the Form 5500, we take advantage of the availability for an extension and file that form for all bundled plans on our platform so that the Form 5500 filing deadline is extended to October 15. The IRS may send an extension acknowledgement letter to you up to six months after the extension is filed by us. You are not required to respond to that letter. If you like, you can confirm that your Form 5500 was filed by us by the October 15 deadline by following the steps above. We typically file these in early October.
I received a letter from the IRS that my Form 5500 was not filed.
If you received a letter that references a penalty or fee for an unfiled Form 5500, please contact our support team as soon as possible and provide a copy of the letter so we can investigate further.