The Form 5500’s “Get Out of Jail Free Card”

There are not too many true “Get Out of Jail Free Cards,” found in ERISA particularly when the mandates are tied to both the IRS and DOL. The Form 5500 has a true legitimate one – it is called the extension and is applied by mailing out to the IRS the Form 5558. If postmarked before or by the DOL deadline date for the Form 5500, the Plan Administrator immediately has another 2 ½ months before e-filing is required (a savings of $750, the penalty fee assessed if the 5500 was not filed for 75 days after the original deadline).

Wrangle hears from countless brokers of their concern regarding the extension being used. In their eyes, the extension of the Form 5500 is labeled as a failure on their part for not achieving the goal of filing on the original due date for their client.  However, in the employee benefits’ arena, there are numerous reasons why holding up such a standard is a tremendous burden.

Here are 9 key reasons why a 5500 can need the extension, all of which are unavoidable by the Broker:

1. The carrier’s Schedule A’s system experiences a glitch delaying the information from reaching either Wrangle or the broker, as recently experienced with Kaiser Permanente.
2. Vendors for such benefits as EAP, Wellness plans, etc. refuse to issue a Schedule A because they are not deemed as insurance carriers and therefore feel they are not required to submit the Schedule A (the blog on December 20^th will cover EAP/Wellness issues with the 5500 report)
3. Plan Sponsors require extra time to review the Form 5500 report
4. During a merger/acquisition a Form 5500 report is overlooked or not known needing to be filed until the last minute
5. Filing details on the worksheet submitted to Wrangle have errors that need to be ironed out prior to the Form 5500 report being finalized in a complete and accurate manner
6. If an ERISA Plan is under a trust, the IQPA report from the CPA is delayed.
7. Wrangle experiences an influx of reports to be completed too close to the deadline as the Best Practices Timeline was not followed.
8. Plan Administrator is not available to sign the Form 5500 report
9. The Plan Administrator has to extend their 401K or retirement 5500 and would like to send out only one SAR mailing. They then request to extend the H&W 5500 so the distribution date for both the 401K and H&W 5500 are the same.

The Federal Government does not readily grant “Get Out of Jail Free Cards” without good reason or value.

To have access to one is certainly a coveted opportunity to meet the demands of the always evolving world

of employee benefits.

Characteristics of the One-time Extension option for an additional 2 ½ months:

1. 1. Form to use: Form 5558
   2. Postmarked on or before the original due date
   3. No signatures required
   4. Can only be mailed; currently not allowed to be e-filed
   5. Sent to the IRS, not the DOL
   6. IRS will not excuse for mistakes on the Form 5558

Where is the proof Form 5558 was sent by Wrangle on Behalf of a Plan Administrator?

• A copy of the Form 5558 may be downloaded from the same website where the 5500s are housed.
• For requests of mailing receipts: the 5500 consultant can email a scanned copy of the certified, return receipts from when Wrangle mailed the forms to the IRS.