As you prepare to file Form 5500 by the July 31 deadline, here are answers to some of the questions you may have.
Do I need to file Form 5500?
Yes, if you have 100 or more participants (including spouses or other dependents) at the beginning of your plan year, you must file Form 5500 with the related schedules.
What benefit plans require Form 5500?
Be sure to file for ALL benefit plans including your company’s 401(k) or 403(b), life and/or disability insurance, medical, dental, or vision plans. (Note that the rules are different for government or church plans.)
Is there an easier way to file?
If you have multiple plans that require form 5500, ERISA allows for a ‘wrap document’ that describes all of the plans in one document. Such a document will save you time and money by only filing one document. You’ll want to consult an attorney who specializes in ERISA issues to make sure that the language meets the ERISA requirements.
What is included in a wrap document?
A wrap document includes your administrative policies for all plans, and details the coverage for each plan. Policies include legal obligations, your right to make changes and/or terminate the plan, and other discretionary powers. Such a document is helpful to have with regard to your fiduciary liability.
What happens if I don’t file on time?
Don’t even think about it! The penalties can run you up to $1,100 per day, per plan – with no maximum. If you discover that you’re delinquent in filing, quickly apply for the Delinquent Filer Voluntary Compliance (DFVC) Program through the Department of Labor (DOL). Only by coming forward before the DOL notifies you, the DFVC program allows for significantly reduced penalties – a maximum of $4,000 per plan, regardless of the number of years delinquency.
You can contact me, Dalton Cox, if you have specific questions about filing Form 5500 for your plan.