The Calendar year Form 5500s’s initial deadline, July 31st, is fast approaching. Are you ready?
Here are six key notes to keep in mind to help meet the deadline as well as be mindful of what else surrounds July 31st:
1. The following carriers will issue Schedule As only to the client, sometimes to the broker and rarely to preparers such as Wrangle. As the broker please be diligent to collect these Schedule As and forward them on to Wrangle:
– Cigna
– MetLife
– Aflac
– Colonial
Additionally, here are other carriers that have a reputation for being slow. Again, please allow more time to collect the data.
– TransAmerica
– Independent Blue Cross
– American Fidelity
If a Schedule A is delayed, the 5500 can be extended to allow more time to receive that data. If the extended due date is approaching, a placeholder can be inserted to show the benefit was part of the Plan. Once the Schedule A arrives, and the 5500 had to be e-filed to meet the extended deadline, the report can be amended with the complete set of details for the Schedule A (there are no penalties or negative connotations for amending).
2. Trusts and Multiple Employer filings require extra material to be attached to the reports. As a result, the process in obtaining the data needs to either start earlier in the year or the client should plan for the extension of the 5500 deadline to be applied (application for the extension is carried out through the Form 5558).
Trusts May Require:
– Schedule C
– Schedule D
– Schedule H or I
– If Schedule H, then also the IQPA report
Multiple Employers:
– If filing a MEWA, the 5500 requires the Form M1 filing authorization code
– Schedule D, possibly
– List of Participating Employers and their EINs
– If under a trust, a list of participating employers along with a good faith estimate of their percentage contribution to the Plan
3. Know where the signer for the Form 5500 is to be in July especially since this is a popular month for vacations. What are the requirements to be a signer?
– The person signing the Form 5500 is signing under penalty of perjury.
– The person signing should be an officer of the company or have authority over the The Plan Administrator does not mean a person performing daily administration functions nor a TPA.
– The person signing should have fiduciary liability insurance.
4. Big deadlines may bring surprises and you may need shift gears quickly. Examples:
– Clients that experienced a merger/acquisition may have short plan years that shifted the deadline, terminated plans that may need a final report or they may have created a MEWA which is required to have a filing regardless of the participant count.
– A trust that you thought was terminated still has Plan Assets which requires a Form 5500 filing.
5. If the client has a self-funded benefit and wants to use the Form 5500 to calculate the PCORI fee, the 5500 has to file on or before July 31st. The extension for this situation is not an option.
6. Waiting until July 30th or July 31st to e-file may create a roadblock. The DOL’s EFAST2 filing system tends to experience glitches from time to time. A filing may not be successful in transmission.
One final thought – the extension provides an additional 2 ½ months. This is a free gift from the Department of Labor. To ensure it can be applied, the form (which ironically is to go to the IRS) for the extension, Form 5558, must be mailed on or before the deadline. The IRS form cannot be e-filed. Best practice is to use certified, return receipt mail. Wrangle maintains this proof for filing the extension on time with the certified mail receipt to the IRS to protect your client from incorrect denials of extension and to prevent penalty fees.