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Linda T. Fisher 5500 Consulting, LLC Newsletter
Keeping You Informed!
April 2012
Greetings!

Happy Spring!! Schedule C reporting and service provider fee disclosures continue to be hot topics in the retirement plan and Form 5500 arena, especially with the 408(b)(2) due date of July 1, 2012 quickly approaching. 

 

This month's newsletter alerts you of several IRS issues they need to resolve before you can submit your Form 8955-SSA's electronically and one-participant plans on Form 55000-SF's. And the DOL continues to send out more Schedule C notices based on 2010 Form 5500 filings.

 

We continue to provide Form 5500 related government updates in addition to providing helpful articles. We know that you likely have more responsibilities than just Form 5500 preparation, so to keep you in the loop, we are providing 5500 related guidance directly to you! Stay tuned each month to learn about:

  • Solutions to Common Errors;
  • Dept. of Labor and IRS Updates;
  • Specific Schedule Guidance; and 
  • Training Offerings!
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We Can Assist With Training for the 2011 Plan Year!


Save time by turning the training task to us!
 

We know that effective Form 5500 training is hard to find. We can train you or your team on a variety of Form 5500 topics. Whether you have an experienced team that just needs to brush-up on current changes since last year, or you have new Form 5500 preparers that need the full training package, let us know. 
 
Is Schedule C still an area of confusion? We can assist with training that will get you on the right track for very low cost.
 
Are you a Form 5500 reviewer, but don't have a good understanding of how the certain schedules should coordinate with others? 
 
You and your people deserve to know more!  Click for more about our training offers! 
In This Issue
DOL Schedule C Notices Keep Coming
Health and Welfare Wrap Documents
2011 Form 8955-SSA Has been Posted!
Beware - IRS Encourages One-Participant Plans to File Form 5500-SF
 DOL Schedule C Notices Keeping Coming


Last month - we reported the start of DOL Schedule C related notices being sent out. There have also been many other Form 5500 related notices sent out for a variety of reasons. So watch out for these since "word on the street" is the number of notices sent is around 3,000. 

We provided this alert to you and recommended that you inform your clients to keep a look-out for these. Especially to the signers of the 2010 Form 5500 filings - which is who they are being sent to. 

Recently, I talked to Mr. Scott Albert, of the DOL, who is at the forefront of Schedule C enforcement and he appreciated my "getting the word out" through this newsletter and through a recent National Institute of Pension Administrators (NIPA) webcast. 

Notices are being sent to Plan Sponsors and Administrators of large plans that had no Schedule C as part of their filing when one should have been attached and also for plans that had at least mutual fund investments and Schedule C, Line 1 reported no (or very little) Eligible Indirect Compensation (EIC). Expect this type of targeting to stretch to plans that invested in common collective trusts (CCT's) and pooled separate accounts (PSA's) with no EIC reported on Schedule C, Line 1. 

Keep in mind that direct compensation is not a common form of payment paid to mutual funds, CCT's and PSA's. These funds are compensated through expense ratios that are charged to their investors. So they would not be reported on Part I, Line 2 of Schedule C, just on Line 1.

Stay tuned for an upcoming webcast that dives into Schedule C reporting to clarify the basic reporting requirements with numerous examples, including both common and more complex scenarios along with sorting through various non-monetary compensation scenarios.
Health and Welfare Wrap Plans Are the Way to Go


 If your company has or if you prepare multiple health and welfare plan filings for a single employer, for unfunded plans, you are creating more filings and paperwork than necessary. Years ago, common thought and practice was to create a separate Form 5500 filing for every benefit: a medical plan, dental plan, vision plan, life plan, etc. 
 
Fast forward to today and you will find that whether the Plan Sponsor is small, medium or large, the major trend with health and welfare plan Form 5500 filings is to combine all benefits into a single plan by creating a "Wrap Document." This short document states that all of the company's ERISA benefits that were previously reported in separate Form 5500 filings (e.g. Plan 501, 502, 503, etc.) will be reported as a single Form 5500 filing going forward. 
 
Note that most ERISA attorneys will be more likely to approve this change going forward, (e.g for the 2012 plan year), rather than applying it retroactively to the 2011 plan year, if a wrap document is now being created. The Plan Sponsor can still maintain unique SPD's and benefit packages for different employee groups, and still reduce  the number of Form 5500 filings down to one. Now is a great time to do this before we get too far into 2012.
 
We also recommend for health and welfare benefits that are funded through a 501(c)(9) VEBA Trust, these should be maintained as a separate Form 5500 filing. The advantage of this is so the financial statements only include the benefits that actually flow through the VEBA Trust - rather than also including benefits that don't and therefore adding more work and costs to create the plan's financials and independent audit report (required for plans with over 100 participants).  
 
Questions! Contact us at [email protected] and we can help!
2011 Form 8955-SSA is Released, But Do Not Submit Electronically 'for the Moment'
 

 

The IRS recently released the 2011 plan year Form 8955-SSA and its instructions. Thank you IRS! Now we can work on the 2011 Form 5500 and Form 8955-SSA at the same time, which is a great improvement from the 2009 and 2010 forms and reporting delays. 
 
When comparing the 2011 form with the 2010 version, no changes have been made but keep tabs on the Form 8955-SSA FAQ's site since it seems that is where clarifications and other related announcements are posted.
 
However, as of the issuance of this newsletter (4/17/2012), there is a system problem within the IRS' FIRE acceptance system, if you try to submit electronically. This is true for 2010 forms also. It seems that programming was revised within the IRS' FIRE System that is inconsistent with the form's instructions. Any Form 8955-SSA Entry Codes of "C" or "D"  are causing an error because they do not require "Type of Annuity" or "Payment Frequency" while FIRE is requiring these for all entries. So - for the moment we are back to filing on paper for those that may be due soon. Or a "Bad" electronic submission will be considered submitted, as long as issues are resolved within 60 days of the initial submission.
BEWARE: IRS Encourages One-Participant Plans
 to File Form 5500-SF instead of 5500-EZ

 The popularity of online videos is not just on You Tube. The IRS has created numerous videos to deliver their messages more effectively. Here is one that encourages one-person plan Form 5500 filers to complete and submit a 5500-SF rather than the 5500-EZ that they may have filed in the past. They claim that this will ensure better accuracy and of course, cost savings at the IRS. 

 

However, we are familiar with several one-participant plans that were submitted on a Form 5500-SF, for 2011,  AND they are being posted on the DOL's Form 5500 Search Site - even though we have all been assured they would not be. Until we see this fixed, I would not encourage this change of filing method at this time. Here is the video that is ironically footnoted with "It should not be considered official IRS guidance." VIDEO

We would love to hear from you! Your comments and questions regarding this newsletter and future topics are important to us!
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Sincerely,
 

Linda Fisher
Linda T. Fisher 5500 Consulting, LLC
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Our Mission
Linda T. Fisher, owner of Linda T. Fisher 5500 Consulting, LLC  has prepared and managed Form 5500 filings for 17 years and serves as a technical resource for fellow employee benefit plan professionals and plan sponsors that prepare their own filings. 
 
She is fully aware that as employee benefit laws change, plan sponsors become confused about their filing requirements. 
 
Our mission is to educate all those involved with Form 5500 preparation and review. We do this through our preparation services, offering training programs for both preparers and reviewers, along with 'as needed' coaching.