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

December 2014



Wishing all of our readers a happy healthy holiday season with fun-filled events that will be lasting cherished memories!  A big thank you to all of our clients and friends for making this year another successful one! If you haven't noticed yet, the 2014 Form 5500 series forms and instructions were posted on December 15, 2014 on the DOL website. See our first article below for a link to these in addition to our second article that talks about one of the important 2014 Form 5500 changes. 

 

Happy Holidays and Happy New Year!!

 

We would love to hear from you in regards to helpful hints that were instrumental to completing filings sooner. We will then share your success stories and strategies with our readers. Send an e-mail to [email protected].

 

We appreciate all of our subscribers and contributors to this newsletter and to your Form 5500 ongoing quality efforts! Our goal continues to keep you informed Form 5500 experts!

 

If you have been a regular reader of our monthly Form 5500 updates, you have seen that the rules continue to change and new guidance continues to be released. We all strive to stay on top of these changes and guidance which makes our jobs both challenging and exciting. 

 

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:

  • Dept. of Labor and IRS Updates;
  • Specific Schedule Guidance; 
  • Training Offerings; and
  • Solutions to Common Errors!
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Form 5500 Training for Preparers and Reviewers
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We know that effective Form 5500 training is hard to find. We can train you and your team on a variety of Form 5500 topics. Whether you have an experienced team that just needs to brush-up on new changes since last year, you have new Form 5500 preparers that need the full training package, or you prepare your company's filings and are not quite sure what it all means. 


 

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 that is ultimately responsible for your filings'  accuracy but don't have a good understanding of what it all means? We have an excellent Reviewer Training session that addresses the more important line items and potential red flags.  


 

You and your people deserve to know more!  Retirement and Health and Welfare Plan Compliance is vital!  Click for more about our training offers!
 
Questions? Send them to [email protected] and we can assist!!  
In This Issue
2014 Form 5500 Series Forms and Instructions are Posted!.
New Form 5500 Reporting for Multiple Employer Plans
New IRS Questions for 2015 Form 5500 and Form 5500-SUP
2014 Form 5500 Series Forms and Instructions are Posted!
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On December 15, 2014, the Department of Labor (DOL) announced the official release of the 2014 Form 5500, Form 5500-SF forms and instructions. Though the DOL states the 2014 forms should be used for informational purposes only, we do not expect them to change at this late date before the final versions are released on or about January 1, 2015. A draft of the 2014 Form 5500-EZ and instructions were posted on September 3, 2014 by the IRS - http://www.irs.gov/pub/irs-dft/i5500ez--dft.pdf

 

See our August 2014 newsletter which discusses the 2014 Form 5500 series changes. Also, remember, once we are in 2015, if you are preparing a filing for a plan year prior to 2011, they must be prepared on the most current form available which will be a 2014 form.

 

New Form 5500 Reporting for Multiple Employer Plans

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Effective with the 2014 plan year (or as stated in the ruling "for plan years beginning after December 31, 2013"), there will be a new Form 5500 reporting requirement for multiple employer plans. This new requirement is related to a new law that President Obama signed on April 7, 2014. The law, titled "The Cooperative and Small Employer Charity Pension Flexibility Act of 2014" (CSEC) amended the funding rules for pension plans that are sponsored by charitable and cooperative organizations. Even though the CSEC Act was intended for certain defined benefit plans, this new annual reporting requirement applies to all multiple employer plans.

The CSEC Act added a new subsection (g) to ERISA Section 103 which requires multiple employer plans to include a list of participating employers during the plan year. The 2014 Form 5500 instructions will direct the preparer of ALL multiple-employer plans to include an attachment with the following information:
  • Name of each participating employer and their respective EIN's, and
  • A good faith estimate of each employer's percentage of the plan's total contributions made during the plan year (this should include both employer and employee contributions).

Contributions can be reported on a cash, modified cash or accrual basis as long as one method is used consistently. If a participating employer made no contributions, enter "0" in element (c ). A template is provided in the 2014 Form 5500 instructions with the following format:

____________________________________________________________________________

Multiple-Employer Plan Participating Employer Information

[Insert Name of Plan and EIN/PN as shown on the Form 5500 or Form 5500-SF]
 

 

(a) Name of Participating Employer          (b) EIN          (c ) Percent of Total Contributions*

(a) Name of Participating Employer          (b) EIN          (c ) Percent of Total Contributions*

Complete as many entries as needed to report all participating employers.
____________________________________________________________________________

The required format should be used to avoid potential filing correspondence from the DOL. The 2014 Form 5500, Part I, Line A has a reminder about this attachment, which is located next to the "Multiple-Employer" box.  


 

*Note - Multiple-employer welfare plans that are exempt from filing financial statements, are not required to provide the percent of total contributions (c).
New IRS Questions for 2015 Form 5500 or Form 5500-SUP

 

The IRS posted a two-page new form titled "Form 5500-SUP" on their website October 21, 2014. No instructions were posted along with it so right now there seems to be more questions than definitive answers in regards to the questions on this form. We learned that the same questions on the Form 5500-SUP are planned to be added to the 2015 Form 5500, however, plans that are not required to file electronically (those that have fewer than 250 tax returns of any type during the calendar year) will have the option to answer these new IRS questions on the paper version of the Form 5500-SUP.

 

Bringing Questions Back from Prior Years

A few of the Form 5500-SUP questions are from prior year versions of the Form 5500 and its schedules that were taken away a few years ago. For example, they are bringing back questions like the required 410(b) non-discrimination/coverage testing: the Ratio Percentage Test and Average Benefits Test. They are also asking about ADP/ACP testing versus the safe-harbor method. A few ESOP questions are also reappearing, for example, whether an ESOP plan paid dividends on the employer's stock in addition to the most recent favorable determination letter date.

 

A Few New Questions
 
There are several new questions to the Form 5500 series that deal with the plan sponsor's corporate tax return. For example, the amount of contributions deducted on the corporate return and whether this amount exceeds the deductible limit. Another question, did the plan's trust incur unrelated business taxable income? So for TPA's and other outsourced Form 5500 preparers, information gathering efforts will need to expand to include the employer's finance personnel that work on the corporate tax return.

 

Even though we will not be working on these questions until after the 2015 plan year ends, we need to confirm their meaning so we can prepare systems and personnel in advance of this expanded benefit plan reporting.

 

Concern for Confidentiality
Since we are expecting the same questions that appear on the Form 5500-SUP to also be part of the Form 5500 there is concern around confidentiality.  A few items on the proposed Form 5500-SUP seem like they could be considered confidential and should not be posted publicly. For example, the Form 5500-SUP requests the preparer's information (not stated as being optional like on the Form 5500) so this information could potentially be posted publicly but preparers are not set-up to answer specific participant questions. Another concern, what if a plan has issues with nondiscrimination testing or  may not have timely amended the plan for all tax law changes yet? These can lead to confidential issues.

 

More Questions

  • What is the Form 5500-SUP due date?  Since the 5500-SUP asks for the Form 5500's EFAST2 Acknowledgement ID, will they require both forms to be due at the same time?
  • The Form 5500-SUP has a Form 5558 box; does this imply the same due date for both forms?
  • Why is "DFE" mentioned on the signature line? 
  • The Form 5500-SUP requests the trust EIN but we expect many plans do not have a unique EIN.
  • Why is the IRS asking for this additional information? Will they be using all of it?
We hope the Form 5500-SUP instructions are provided soon to gain a better understanding of this new form.

 

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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 20 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, training programs for both preparers and reviewers, along with 'as needed' coaching.