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Linda T. Fisher 5500 Consulting, LLC Newsletter
Keeping You Informed!
February 2013
Greetings!

Welcome to our February Newsletter! Even though the holiday season that was full of events to look forward to,  we continue to have so many special days during the cold winter months following it: Martin Luther King Day, Groundhog Day, Lincoln's birthday (especially in his home state of Illinois), Valentine's Day,  Presidents Day (which seems to stretch over two weeks), the numerous awards shows (I've lost count there are so many), and of course, Super Bowl Sunday. And according to the calendar - Great News, Spring is almost here! Our clocks will soon be 'Springing Forward' on March 10th and the official first day of Spring is March 20!! Wishing everyone warmer days ahead!

 

The government continues to provide important employee benefit related updates that we bring to you in the articles below. 

 

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!
Did you miss any prior Newsletter issues? 
Click Here to catch up.
   
Pass this newsletter along to others that will benefit!! 
 
Stay Tuned for Form 5500 Training Webinars



To answer many requests that we've received for Form 5500 updates, and to expand on our newsletter articles, we will be offering several webinars packed full of Form 5500 focused guidance 
designed
 for employee benefit professionals who are responsible for Form 5500 preparation, information inputs or review:
  • TPA's
  • HR professionals
  • Employee Benefit Accounting personnel
  • Reviewers
Highlights:
  • DOL & IRS Updates and Initiatives
  • 2012 Form Changes, Issues and Concerns
  • Top 5 Red Flags and Other Common Errors
  • Clarifying Form 8955-SSA Confusion 
  • Updates Regarding EFAST2  Requirements
  • Answers To Your Questions
  • Simplifying the Important Reviewer Step
These will take place this coming Spring/Summer so stay tuned for more details and sign-up. 
In This Issue
PTIN Program Is Reopened
How To Report 408(b)(2) Disclosure Failures
DFVC Program Updates
DOL Webcast - Helping Small Business With Fee Disclosures
PTIN Update from Last Month's Article
 

 UPDATE

Since our hot off the press "PTIN Requirements Suspended" opening article last month, the IRS reopened the PTIN program, including the online system, on February 2, 2013. 

 

They stated that "the ruling did not affect the regulatory practice for CPA's, enrolled agents, enrolled retirement plan agents or enrolled actuaries."

 

So we are back to the PTIN rules that require employee benefit professionals who sign certain returns (Form 945, Form 990, Form 990-T and Form 5330) to continue to include their PTIN on these forms, and abide by the PTIN registration and renewal requirements. 

How To Report 408(b)(2) Disclosure Failures

Background

ERISA requires fiduciaries, those responsible for managing the plan, to ensure services provided to the plan are necessary and the cost of services is reasonable. To determine if the costs are reasonable, covered service providers "CSP's" must disclose information about the services they are providing and the resulting direct and indirect compensation they will receive. This applies to CSP's who expect to receive at least $1,000 in compensation for services to an ERISA plan. (This does not apply to employee welfare benefit plans. EBSA intends to separately publish proposed disclosure requirements for welfare benefit plans in the future.)

 

The 2012 Form 5500 instructions fail to provide guidance regarding how to report service providers who do not provide the required 408(b)(2) disclosures, so we are providing it here with related links. 

 

Prohibited Transaction

If a service provider fails to provide the required 408(b)(2) disclosure information, the contract between the plan and the service provider is prohibited by ERISA, and the responsible plan fiduciary will have engaged in a prohibited transaction.

 

However, an exception allows responsible plan fiduciaries who did not know that the service provider had failed to disclose some of the required information to avoid engaging in a prohibited transaction. 

 

Exception

An exception exists if plan fiduciaries did not know a CSP failed to disclose some of the required information if certain conditions are met:

  • Plan fiduciary must request the missing information in writing from the covered service provider; 
  • If the CSP fails to comply within 90 days,  the plan fiduciary notifies the Department of Labor within 30 days by completing and forwarding a Fee Disclosure Failure Notice.  

Fee Disclosure Failure Notice

Notification to the EBSA can be completed electronically by starting with this web page and then going to the online Failure Notice. Once completed and submitted, filers will receive immediate confirmation that the Fee Disclosure Failure Notice was received. There is also a paper filing option. 

 

And as we often say, "No News is Good News," once this notice is submitted to EBSA, if it is accepted, you will not receive a confirmation.

EBSA Updates DFVC Program

On January 28, 2013, the EBSA published in the Federal Register, a comprehensive update and restatement notice that describes changes made to the Department of Labor's Delinquent Filers Voluntary Compliance (DFVC) Program since it was last updated in 2002. 
 

  

Background

The basic penalty under the DFVC Program is $10 per day for delinquent filings. The program also caps the maximum penalty for a single late annual report at $750 for small plans and $2,000 for large plans. For plans with multiple delinquent filings, the per-plan penalties are limited to $1,500 for small plans and $4,000 for large plans. 

 

 A Few Items to Note
  • Form 5500-SF cannot be used for plan years prior to 2009.  
  • Electronic submission via EFAST2 is now required for all Form 5500 filings including those submitted under the DFVC Program, so paper filings are no longer an option except when paying the DFVC Program fee via a check. Then in addition to submitting the delinquent filing via EFAST2, the check must be sent in with a paper copy of each Form 5500, pages 1 and 2 to: DFVC DOL, PO Box 71361, Philadelphia, PA 19176-1361.
  • All delinquent plan year filings must be submitted at the same time, so the DFVC fee is handled and calculated once. You cannot submit two plan year late filings with the $4,000 fee and then separately submit additional late filings with no payment, because you paid the maximum for that plan previously.
  • Delinquent filings for plan years of 2008 and prior must use actual plan year Schedules B, SB, MB, P, R, and T and then attached as a pdf to the current year form filing.
  • For 2008 and prior plan year Schedule C preparation, you have the option to complete a current year Schedule C and just report the direct compensation paid by the plan and termination of plan accountant or actuary, when applicable, or attach a pdf of the correct year Schedule C. 
  • 403(b) plan filings for 2008 and prior plan years can still follow the limited reporting exception option, but are required to use the most recent plan year form available. Limited 403(b) reporting requires only Form 5500, Part I and Part II, lines 1-4, and line 8 to be completed for 2008 and prior plan years.
  • Delinquent filings for plan years beginning on or after January 1, 2009, that are more than three years late, must use the most recent plan year form and schedules. This will impact filings next year, when the most recent form available will be for 2013, which is more than 3 years from 2009. So a delinquent 2009 filing must be prepared on a 2013 form. 

 

DFVC Program updates going forward will be posted on the DOL's website at www.dol/gov/ebsa rather than through issuing additional Federal Register notices. 
DOL Webcast - This Thursday (2/28)

Helping Small Business Owners With New Retirement Plan Fee Disclosures


Thursday, February 28, 2013

5:00 - 6:00pm EST 

 

If you work with small business owners that sponsor a retirement plan, a new rule from the DOL will help them in selecting and monitoring their plan's service providers. Under this rule, service providers must disclose information on the administrative and investment costs associated with their services to the plan. This information will help them make informed decisions in considering whether the arrangement and amount paid for the services are reasonable.

 

The U.S. Department of Labor's Employee Benefits Security Administration is sponsoring a webcast to explain this new rule (408(b)(2), including the type of information to expect and how to use this new information in carrying out the Plan Sponsor's responsibilities. The webcast also will cover what to do to protect yourself if you do not receive the information.

 

Sign-up here.

 


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

Click here to provide your feedback!
 
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 18 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, it becomes challenging for plan sponsors to keep current with all filing requirements. 
 
Our mission is to educate all those responsible for 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.