The IRS, the Department of Labor (DOL) and the Pension Benefit Guaranty Corporation (PGBC) published proposed updates to the Form 5500 annual return in the Federal Register on July 21, 2016, that could have a significant effect on plan reporting.
Plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) must file annual returns, the Form 5500 or for small filers, the Form 5500-SF along with required attachments and schedules. The IRS, the DOL and the PGBC use the information reported to enforce compliance with ERISA, but the data also provide plan participants insight into the way their retirement plan operates.
Proposed updates to the Form 5500 (Report of Employee Benefit Plan) and the Form 5500-SF (Report of Small Employee Benefit Plan) came in two parts, annual information and return reports and annual reporting and disclosure. Both sets of changes would require additional information from plan filers that would assist the agencies with their compliance monitoring and provide data the public and beneficiaries could use to understand plans and their investments. Taken together, the changes fulfill five goals:
- Modernize financial reporting
- Provide greater information regarding group health plans
- Enhance data mineability
- Improve service provider fee information
- Enhance compliance with ERISA and the code.
The proposed changes to the Form 5500 would significantly increase reporting obligations for health and welfare plans.
All updates to the Form 5500 are also coordinated with updates to the ERISA Filing Acceptance System II (EFAST2), the electronic processing system for the Form 5500 and Form 5500-SF.
Most of the changes take effect for the Plan Year 2019 Form 5500. Comments on the changes are due to the DOL before October 4, 2016.
Stay tuned for more information about how the various proposed changes could affect your reporting. For specific comments, questions or concerns about the changes, please contact Hal Hunt of MHM’s Professional Standards Group. Hal can be reached at email@example.com or 816.945.5610.
Published on September 27, 2016
© Copyright CBIZ, Inc. and MHM. All rights reserved. Use of the material contained herein without the express written consent of the firms is prohibited by law. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.
CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ). MHM (Mayer Hoffman McCann P.C.) is an independent CPA firm that provides audit, review and attest services, and works closely with CBIZ, a business consulting, tax and financial services provider. CBIZ and MHM are members of Kreston International Limited, a global network of independent accounting firms. This publication is protected by U.S. and international copyright laws and treaties. Material contained in this publication is informational and promotional in nature and not intended to be specific financial, tax or consulting advice. Readers are advised to seek professional consultation regarding circumstances affecting their organization.