Form 5500 ensures employee benefits plans meet annual reporting requirements and regulations. Explore vital details and deadlines for Form 5500 to ensure plan compliance.
Is your employee benefits plan subject to the Employee Retirement Income Security Act (ERISA)? If so, it’s essential to understand the Department of Labor’s (DOL’s) annual filing requirements for IRS Form 5500.
Applicable plans include health and welfare, retirement and self-funded plans. You must file Form 5500 if your benefits plan holds its assets in a trust or has 100 participants or more at the beginning of the plan year.
The Form 5500 series also includes forms for one-participant plans and nonexempt plans with fewer than 100 participants at the beginning of the plan year. Common exemptions include:
- Church plans
- Governmental plans
- Welfare benefit plans with fewer than 100 participants at the beginning of the plan year and that are unfunded, fully insured, or a combination of unfunded and insured
Work with your benefits adviser to determine your exemption status and the forms you must file.
The IRS, DOL and Pension Benefit Guaranty Corporation jointly created the Form 5500 series to monitor pension and welfare benefits plan compliance. Form 5500 ensures that benefits plans meet annual reporting requirements and regulations under the Internal Revenue Code and ERISA.
Form 5500 requires information on the following aspects of your plan:
Operations and administration, including insurance and service provider details
Plan qualifications
Financial conditions
Investments
Plans that must file Form 5500
You file Form 5500 with the DOL to ensure compliance with all regulations. Plans include:
- Medical
- Dental
- Life insurance
- Disability
- Health reimbursement arrangements
- Flexible spending accounts
- 401(k) plans
- Profit-sharing plans
- Stock bonus plans
- Money purchase plans
- Pension plans
- Individual retirement accounts established under Internal Revenue Code Section 408(c)
You may want to consolidate multiple welfare benefits plans into a single plan with a wrap document. Doing so can simplify your reporting and compliance requirements. It can also reduce costs and administrative efforts. A wrap document enables you to file one Form 5500 instead of multiple forms for each benefits plan.
The insurance solutions firm Acrisure notes that a wrap document provides comprehensive, ERISA-required information. It can summarize all of your plans, coverages, benefits, eligibility requirements and other compliance information into a single, easy-to-understand document.
If you have multiple benefits plans, ask your broker or benefits adviser about creating a wrap document. They can ensure compliance with plan documentation, communication and deadline requirements. Note that you must issue your wrap document before filing Form 5500.
The Form 5500 series
The Form 5500 series consists of three forms:
- Form 5500
- Form 5500-SF
- Form 5500-EZ
Forbes magazine reports that the form you need depends on your business size and structure. The following table outlines when each of the forms applies.
| Company size/structure | Required form |
|---|---|
| Companies with 100 or more plan participants | Form 5500 |
| Nonexempt organizations with less than 100 participants at the beginning of the plan year | Form 5500-SF (This is a simplified and shorter form.) |
| Businesses with one plan participant, e.g., a company owner or partner with a stand-alone retirement plan | Form 5500-EZ |
Deadlines
You must file Form 5500 electronically by the last day of the seventh month following the end of your plan year. For calendar year plans, the Form 5500 deadline is July 31. If you use a wrap document, you must write it and make it effective before the Form 5500 deadline.
File your form using the ERISA Filing Acceptance System (EFAST2). You can access the EFAST2 website here.
If you need an extension, you must file Form 5558 before your plan’s deadline. The one-time extension provides an additional 2½ months to complete Form 5500.
Meeting deadlines is crucial to avoid penalties. The advisory and public accounting firm Withum reports that late filings can result in fines from the IRS and DOL. The IRS penalty is $250 each day that Form 5500 is late, up to $150,000 for the plan year. The DOL penalty is $2,586 a day, and there is no maximum to this penalty.
The DOL encourages employers to self-correct violations of ERISA reporting requirements. The Delinquent Filer Voluntary Compliance Program (DFVCP) can help you voluntarily correct violations if you file Form 5500 late or fail to file. The DFVCP allows you to satisfy DOL requirements and reduce civil penalties.
For more information about the DFVCP, visit the EBSA’s Correction Programs webpage.
Summary annual report
The payroll solutions company Justworks notes that you must also provide plan participants with a summary annual report outlining the information in Form 5500. This report includes information on your plan’s financial condition and highlights participants’ right to receive a copy of the full annual Form 5500. You must distribute the summary annual report to plan participants within two months of your Form 5500 deadline.
- The summary annual report deadline for calendar year plans is Sept. 30.
- If you receive a Form 5500 filing extension to Oct. 15, your summary annual report deadline is Dec. 15.
Additional resources
For more information on Form 5500, turn to IRS and DOL resources:
The IRS Form 5500 Corner links to official forms and guidance for completing the required information.
The DOL Form 5500 Series provides access to current tax forms and the electronic filing system for the forms.
For additional support, talk to your insurance broker or benefits adviser. They can help you complete and file the required forms. They can also refer you to vetted accountants or other tax professionals for further guidance and compliance.
Have questions?
For more information on form 5500, reach out to our Employee Benefits team and we’ll be happy to help.
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