Modernization of Form 5500

In 2016, the DOL, IRS, and PBGC proposed revisions to the Form 5500.  If adopted, these revisions will be the most significant overhaul to the Form since 2009. These changes will affect Benefit Plans, Plan Sponsors, Plan Administrators and Plan Service Providers.  The comment period on the proposed revisions ended December 5, 2016. The key takeaways from the proposal are:

•  There will be numerous new compliance questions aimed at specific legal requirements under the Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code, and various other federal laws.

• The agencies are requiring more information related to Plan investments.
• The rules regarding the reporting of indirect compensation will be simplified and made consistent with information already required to be disclosed under DOL regulations.
• Finally, a new schedule will be added for health plans which will also have additional compliance questions, including compliance questions pertaining to the ACA.  Plans will also be required to provide detailed claims data.

The target for implementing these proposed revisions will be for plan years beginning 2019.  There is time to prepare.  More data will need to be collected and more resources than ever will need to be devoted to filing a complete Form 5500.  Again, it’s still early, but it appears that most of the proposed revisions will be adopted.  We will keep Trustees and Service Providers informed.

By Eric Wallin, CPA, Partner, ewallin@legacycpas.com

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