2. PwC
Agenda
Overview of the 2014 Form 5500
• Tips for 2014 Form 5500
• Review of Schedules
• Highlights of processing system
• Form 8955-SSA
• Updates to delinquent filer program
3. PwC
When are audited financial statements required ?
• Large pension plans (100 or more participants)
• 80-to-120 rule
• Small pension plans that do not meet the conditions for the audit waiver
• Large funded welfare plans (100 or more participants)
- VEBAs or taxable trusts
• 80-to-120 rule different for welfare plans because small fully insured or unfunded
welfare plans are not required to file
- Only small funded welfare plans required to file may take advantage of this rule
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June 18, 2015
4. PwC
Small pension plan audit waiver summary
4
Is the plan a pension plan?
Is the Schedule I required as part of the plan’s
annual report?
Do at least 95% of the assets of the plan
constitute 'qualifying plan assets'?
Small pension plan
audit waiver
conditions do not
apply.
Is each person who handles
non-qualifying plan assets
properly bonded in an amount
that is at least equal to the
value of the non-qualifying
plan assets?
The conditions for the waiver
have not been satisfied.
The conditions for the waiver of IQPA
audit and report have been satisfied.
Does the administrator disclose the required
information in the SAR and on request?
No
Yes
No
No
No
No
Yes
Yes
Yes
Yes
June 18, 2015
5. PwC
EFAST2
The IRS has all responsibility for the 5500-EZ and Form 5558 and their processing.
Please call the IRS for questions regarding these Forms
EFAST2 Help Line
• Can’t answer questions regarding Third Party Software
• Can’t view your filing prior to submission to EFAST2
• Can’t see your password or challenge question
• Can answer questions about IFILE
• Can answer questions about Filing Status
• Staffed help line at 1-866-GO-EFAST
(between 8:00 AM and 8:00 PM Eastern Standard)
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June 18, 2015
7. PwC
Check the filing status after filing is submitted
• Important to check the status of your submission attempt and make sure they are
accepted
• DOL requires at least one electronic signature be valid
• Various ways to check the status :
◦ Through the software you used to send your filing
◦ Through the EFAST2 Filing Search webpage
◦ Through EFAST2 Submissions webpage
› If you submitted through IFILE
› If you signed the filing
• Also, monitor your email later for correspondence from the EFAST2/DRC email
address
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June 18, 2015
8. PwC
Check the filing status after filing is submitted
• Note that the signed auditor’s report with financial statements must be attached as a
pdf file
• The pdf file cannot be encrypted or password protected
- “Unprocessable error”
- Remember to pdf in portrait not landscape format
- Print heavy letterheads may result in rejection
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June 18, 2015
9. PwC
When is My Filing Considered Filed?
FAQ38
Not filed….
Unprocessable Submission*
Processable Submission++
Processing++
Filing Unprocessable*
**This submission must be corrected
and re-submitted.
++This submission is still processing
Filed…..
Processing Stopped**
Filing Error**
Filing Received
** Filings with a status of 'Filing
Error' or 'Processing Stopped' must be
corrected through an amended filing
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June 18, 2015
10. PwC
EFAST2 user responsibilities
Document retention
• Plan administrators and DFEs must retain a copy of the filing signed by the Filing
Signer and any acknowledgements received from DOL, along with all other documents
required by IRC and ERISA
• Signer must retain copy of signed Schedule SB or MB
• Must retain copy of Form 5558, if filed (not attached to filing)
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June 18, 2015
11. PwC
Form 8955-SSA
• Annual registration statement identifying terminated vested participants
• Report information on separated participants only on Page 2
- Do not use additional pages 1
- No attachments or other nonstandard format
• Instructions to lines 6a and 6b clarified – do not include any participants who were
previously reported (only report “A’s”)
• Reminder – file with IRS, not EFAST2
• IRS regs issued in September 2014 make e-filing mandatory for 2014
- Paper still an option for filers with under 250 filings (e.g., W-2s) , otherwise file
electronically through FIRE system
- Penalty relief available for delinquent filers
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June 18, 2015
12. PwC
DOL enforcement
15 Day Letters - Incomplete Filings
• Missing Information
• Missing Accountant’s Report
15 Day Letters - Filings with Errors
45 Day Letters
• 45 Days to electronically file if filing was incorrectly filed on paper
• 45 Days to electronically sign the form with a valid signature
Note these are only electronic notices, DOL no longer sends paper notices
Email address used to transmit Form 5500 is the one that is used by DOL to send notices
Make sure to monitor the email account!!
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June 18, 2015
13. PwC
Amended filings
In response to DOL correspondence, you must amend your filing if correcting any errors.
The Entire filing must be filed
If you file Form 5500/5500-SF and receive 'Filing Error,' or 'Processing Stopped' status,
you must check Box B on Form 5500/5500-SF to indicate “amended return” when
submitting revised forms
Do not file as an amended return if previous submission attempts were not successfully
received by EFAST2 due to transmission errors
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June 18, 2015
14. PwC
DFVCP filings
• When filing, filer must check box on line C, Part 1 (Special Extension) of the Form
8955-SSA and enter “DFVCP” in the space provided on Line C
• Pilot program for non-ERISA plan filings – now permanent in Rev. Proc. 2015-32
- IRS provides late filing relief for plans not covered by DFVCP
◦ Penalty payment required - $500 per return up to a maximum of $1500
◦ “one participant” plans - covering only a 100% business owner (or owner and
spouse) or one or more partners in a partnership (or partners and their spouses),
and foreign plans
› Must file complete Form 5500 return, paper version and a transmittal
schedule for each return (Form 14704 found on IRS website)
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June 18, 2015
15. PwC
• IRS Notice 2014-35 provides relief for delinquent Forms 8955-SSA
• Penalties waived if DOL DFVCP requirements met for related Form 5500 series filing
• Paper Form 8955-SSA filed with IRS
• Must file delinquent Form s8955-SSA no later than 30 days after DFVCP filing
- Check the box in part 1, Line C and enter “DFVCP” in description
Delinquent Form 8955-SSA filings
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June 18, 2015
16. PwC
What is auditor’s responsibility regarding the
Form 5500?
• Notes to the financial statements must disclose differences, if any, between the
financial statements and the Schedule H
◦ Remember, Schedule H must show actual dollar figures and not rounded dollar
figures which are permitted on audited financial statements
• Common differences
- Due to timing differences related to methods of accounting
◦ If Form 5500 prepared on cash basis but financial statements prepared on an
accrual basis
- Benefits payable
◦ Must be reported on Form 5500 but not on financial statements
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June 18, 2015
17. PwC
Don’t just look at the Schedule H
• Codes used in Form 5500, Line 8a and 8b describe the benefits/features of the plan
◦ FYI - If new employee rolling over account from prior employer, the plan
administrator can check the prior employer’s Form 5500 on EBSA see if “not
intended to be qualified” code “3C” is listed
• Schedule C – expense information
• Schedule D – existence of master trust, DFEs
• Schedule G – prohibited transactions, leases or loans in default
• Schedule SB and H for contributions & receivables
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June 18, 2015
18. PwC
Take a look at Schedule C
• Facilitates annual review of plan’s fees and expenses as part of a fiduciary’s on-going
obligation to monitor service provider arrangements with the plan
• Report terminated accountants and actuaries
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June 18, 2015
19. PwC
Expenses on Schedules H and C
Schedule H
• Reports expenses paid directly by plan/trust or where employer paid an expense and is
reimbursed by plan
• Includes taxes (UBIT or foreign taxes paid on investments)
• Includes PBGC premiums
• Usually prepared on accrual basis, consistent with financial statements
Schedule C
• Frequently prepared on cash basis
• Includes indirect fees
• Does not include taxes or PBGC premiums
• Note – DOL has sent letters to plan sponsors where no fees shown on Form 5500
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June 18, 2015
20. PwC
A word about delinquent participant
contributions
• All delinquent contributions, whether or not corrected, must be reported on Line 4a of
Schedule H until the year corrected
• Do not report on Line 4d (or Schedule G)
• Delinquent contributions that were corrected using VFCP and PTE 2002-51 are not
considered PTs, so are not disclosed on a supplemental schedule
• Others may be reported on a separate schedule, see the instructions for the required
format
• Filers may also include delinquent loan repayments
• Failure to make deferrals are not the same as delinquent contributions
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June 18, 2015
21. PwC
Master trusts/DFEs
• Expenses reported at master trust level should not also be reported at plan level
• All expenses must be reported – either at trust level or at plan level
• Master trust footnote – review Schedule H for consistency
• Remember master trusts must always file Form 5500 DFEs
- Form 5500 filing is optional for 103-12 IE, CCTs and PSAs
- 103-12 IEs must attach audited financials
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June 18, 2015
23. PwC
Entity Effect of Non/Deficient
Filing on Participating Plans
MTIA Plan filings are deficient
PSA/CCT
Plans must allocate investment among
Schedule H, Part I categories
103-12 IE
Same as PSA/CCT + Full scope audit is
required
GIA Each plan must file as an individual plan
How are DFE investments reported on Schedule H
when DFEs don’t file?
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June 18, 2015
24. PwC
Emerging issues
• IRS Form 8822-B was revised in October 2014
- Filing requirements that relate to business entities with an EIN, such as plan
sponsors
◦ Abandoned EINs, or incorrect addresses
- Report address change, change in responsible party
- Currently no penalty for failure to file
• DOL focus on plan’s internal control environment
- Lost participants
- Uncashed benefit payment checks
- ERISA spending accounts
- Quality of audits
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June 18, 2015
25. PwC
Other Developments
• DOL issued proposed regulations in September 2014 that would require electronic
filing for top-hat and apprenticeship and training plan notices
- No changes in content
- Filers may immediately start using electronic systems to satisfy current paper filing
requirement
- The new electronic filing system for both types of notices is accessible via the EBSA
website
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June 18, 2015
Riquita technical differences and government considerations
The instructions led to confusion when the 8955-SSA was first released as it required the total reported on line 7 (which is the sum of lines 6a and 6b) to be the same as the number of participants listed on line 9. However, there was confusion between the terms ‘required to be reported’ and voluntarily reported’ as compared to the time periods/The IRS revised the instructions to clarify and simplify the statement which now is meant to only report Code A – Participants not previously reported.
For employers with plan years ending in October, November or December 2012 that want to use the Form 5500 method for counting participants for the PCORI fee, the Form 5500 must be filed by July 31, 2013. Accordingly, calendar year filings cannot be extended beyond the regular July 31 deadline. For plans with an October year end, the filing may be extended only for two months, until July 31, 2013; for plan years that end in November, the Form 5500 may be extended only for one month until July 31, 2013.
If an employer is using one of the other methods to count participants for purposes of the PCORI fee, there would not be any reason not to extend the filing deadline.
