We know that many are ready to have 2020 in their rearview mirror. But it’s also nice to have a crystal ball to see into the future. Here is Wrangle’s list of what key details to know for next year on the Form 5500, Wrap Plan Documents and potential aspects within the Employee Benefit industry.
Are there any major changes to the Form 5500 for the coming year? No.
- Very little has been modified from the DOL and IRS. For the Health and Welfare 5500, only the Schedule H, which is used for financials for Large Trusts, has minor modifications added.
Are there new policies at Wrangle that impact the Form 5500? Yes.
- Effective for plan years ending after December 15, 2021, the American Institute for Certified Public Accountants (AICPA), requires [under (SAS) No. 136] a more complete draft of the trust filing Form 5500 to be in place, prior to the auditor conducting the IQPA report. Early adoption is permitted.
A draft of the Form 5500 that is substantially complete includes the forms and schedules that could have a material effect, involving both qualitative and quantitative considerations, on the information in the financial statements and ERISA-required supplemental schedules
For more information on the requirements, here is a helpful article by a CPA. It is on retirement; however, it provides a good outline of expectations.
Since some may adopt the approach sooner rather than later, Wrangle will modify its practice in January 2021. Starting in the new year, Wrangle will have a draft sent once the Schedules As are entered, but prior to completion of the Schedule C and I or H. Wrangle will insert the beginning of the plan year financials (if a trust filing was in place the year prior). Please keep in mind that Wrangle cannot complete the filing until the auditor’s report and the Plan year financials are provided.
The new audit requirements also necessitate the auditor to have the Wrap Plan Document for review; this is another example where Wrap Plan Documents are being taken more seriously.
Are there new policies at Wrangle for ERISA Desk and our plan document services? Yes.
- Both the Wrap Plan Document and Amendment worksheets have been updated.
- The Wrap Plan Document has been reviewed by an ERISA Attorney and received her stamp of approval for 2021.
- The self-audit checklist for Health and Welfare plans has been updated to more closely follow the updated DOL’s enforcement manual.
- Our non-discrimination testing calculation system has been enhanced to be more efficient.
Are there enhancements to our Wrangle Dashboard? Yes.
- The Scorecard’s six boxes are now clickable to directly link your files within each category.
- There is a clear and distinct button to go directly to your drafts of the 5500 reports, the SAR, and the carrier schedules.
- There are additional prompts to distinguish between the 5500 Signer and others who should receive the updates.
- You will be able to connect directly from the Dashboard to the DOL’s EFAST2 site to obtain a copy of the e-filed 5500.
Will there be new educational trainings from Wrangle? Yes.
- We are planning to offer a new educational webinar with guest speakers.
- We will continue to offer live trainings on Health and Welfare 101 and 201, using the 5500 as a Prospect tool and ERISA Wrap Plan Documents and SPDs.
What else is Wrangle monitoring for 2021:
- In January, the DOL will release the updated penalty fees for late filers or missed distributions.
- Our ERISA Desk will keep tabs on any new legislative changes that could impact Wrap Plan Documents. After feeling the effects of the various natural forces in 2020, we have our boots strapped on already to be on the move for 2021.
- We will continue to monitor when the end is declared for the National Emergency due to COVID-19. As a reminder for the Plan Sponsor who faced challenges from COVID-19, the SARs, SPDs, and SMM, which were to be issued on or after March 1st, have until 60 days after the announcement of the end of the COVID-19 National Emergency.
- Back in 2016, the DOL and IRS proposed significant changes for the 2019 Form 5500. For instance, all Plan Sponsors, both small and large would be required to file an additional Schedule – Schedule J was introduced to collect more benefit data. As various groups, such as employee benefit law firms, start to predict what may come into light under the Biden Administration, some say that the original proposed changes may become a reality to have access to more data and for employee benefit cost transparency. Wrangle will be closely monitoring and will report as more information is known.
Overall, Wrangle will bring you all critical information as we learn and decipher how it will make an impact on Form 5500s and ERISA Plan Documents. We continue to strive to be a valued partner and resource for both you and your clients.