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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
Completing a Form 5500 requires more thought and care due to recent changes, according to Janice Wegesin, President of JMW Consulting, Inc. in Petosky, MI. Speaking on May 7, 2008 at the 2008 National Institute of Pension Administrators (NIPA) Annual Forum & Expo in Las Vegas, Nevada, she highlighted some things to know about the 2007 Form 5500 and its schedules and provided practical filing tips.
The Form 5500 instructions provide a voluntary alternative reporting option for eligible plans that is only available for the 2007 and 2008 plan years. She explained that an eligible plan must cover fewer than 25 participants as of the first day of the plan year. In addition, the plan must be eligible for the small plan audit waiver (i.e., waiver from the annual examination and report of an independent qualified public accountant), but not because of enhanced fidelity bonding; must hold no employer securities; must not be a multiemployer plan; and, at all times during the plan year, 100% of the plan assets must be in investments that have a readily ascertainable fair market value.
If eligibility requirements are met, filers should complete the entire Form 5500 and Schedules B, I, and SSA, if applicable. In addition, lines A, B, C, D (identifying information), and line 2 (insurance fees and commissions) of Schedule A should be filled out for any insurance contracts, and identifying information at lines A, B, C, and D and Part II of Schedule R (not applicable to 401(k) plans). Concerning Schedule A, Wegesin explained that no insurance carriers are required to be named in line 1 and all fees and commissions paid by all insurance carriers can be reported on a single Schedule A. However, she noted that even if there are no fees and commissions paid by the contract, Schedule A must still be filed. As to Schedule R, plans with fewer than 25 participants do not have to file Schedule R, unless the plans are subject to minimum funding requirements.
Wegesin pointed out that if lines 3a, 3b, 3c, 3d, 3f, or 3g of Schedule I is answered “Yes,” then the plan cannot use the voluntary alternative reporting option. An affirmative response would indicate that plan assets have been invested in partnership/joint venture interests, employer real property, other real property, employer securities, loans (other than to participants), or tangible personal property. She noted that more information (i.e., lines and schedules) can be given; however, providing less than the minimum discussed above is not allowed. The EFAST system needs the minimum required information.
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