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

March 2015



The 2014 Form 5500 season is gearing up! Plan sponsors are in discussions with their auditors to schedule upcoming audits. Schedule As are rolling in from insurance companies and 2014 Form 5500 filing completions have started.  But, we also want you to beware that the DOL and IRS are increasing their focus to Form 5500 responses and working on many form revisions that we haven't seen for awhile. See our article below regarding the new for 2015 plan years, Form 5500-SUP.  I encourage you to take a look at the draft version of this form, if you haven't already. Also, the IRS Fraud Project that we discuss below is just one small example of how important accurate Form 5500 preparation is because incorrect responses can cause a DOL or IRS audit. 

 

We would love to hear from you in regards to helpful hints that were instrumental to completing filings timely and accurately. 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 ongoing Form 5500 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!
Did you miss any prior Newsletter issues? 
Click Here to catch up!
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Pass this newsletter along to others that will benefit!! 
 
Catch Our Webcast on March 24, 2015 Sponsored by NIPA
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Tuesday, March 24, 2015

11:00 a.m. - 12:40 p.m. CST
Continuing Education Credits: 2 NIPA CPE; 2 ERPA CPE


 

With employee benefit laws continually changing, it becomes challenging for plan sponsors and benefit plan practitioners to keep current with all Form 5500 filing requirements.  This webcast will focus on understanding:

  • 2014 Form 5500/5500-SF series changes, 
  • New Form 8955-SSA electronic filing requirement, 
  • Review of the proposed Form 5500-SUP, 
  • Form 5558 processing and acceptance concerns, 
  • DOL and IRS employee benefit plan current initiatives, 
  • Audit triggers,
  • Common errors and more!

Employee Benefit Practitioners and Plan Sponsors need to better understand the key questions on the Form 5500 series filing that the DOL, IRS, and PBGC often use to initiate an audit of the plan.  Learn what the DOL and IRS are focusing on now for the 2014 plan year and next year for the 2015 plan year.


Form 5500 Training for Preparers and Reviewers
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We Can Assist With Form 5500 Preparer and Reviewer Training!

Save time by turning the training task to us! 

 

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 Here for more about our training offers!
 
Questions? Send them to [email protected] and we can assist!!  
In This Issue
ASPPA's Comments Submitted Regarding 2015 Draft of Form 5500-SUP
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On October 21, 2014, the IRS posted a new form titled "Form 5500-SUP" which asks for additional employee retirement plan information effective for 2015 plan years. The IRS followed on December 18, 2014 with the posting of the Form 5500-SUP instructions. We expect that during the two month period between the release of the 5500-SUP and its instructions, the IRS reconsidered a few questions that appear on the form but are not included in the instructions. The Form 5500-SUP is a paper only form and would be used when the plan sponsor prefers to not answer these questions (expected to be added to Schedule R) on their electronically submitted and internet posted Form 5500 filing. The IRS still cannot require information to be submitted electronically, therefore, this new paper form was created. Comments regarding the 5500-SUP were required to be submitted by February 23, 2015.

 

The American Society of Pension Professionals & Actuaries (ASPPA) submitted a comment letter in response to the draft form and instructions for Form 5500-SUP. The nine-page comment letter, presented the following seven general comments which were followed by more specific guidance:

  1. Delay the implementation of the 5500-SUP for at least one year to allow service providers time to update their data collection systems so the additional information can be provided efficiently and accurately.
  2. Preparer information should not be visible on the EFAST2 public disclosure website and an authorization form should be required before the IRS can directly contact the preparer.
  3. Expand the Form 5500 plan feature codes (on Form 5500, Line 8; Form 5500-SF, Line 9) to include additional plan characteristic needs instead of adding more questions. For example, the draft 5500-SUP asks whether the plan is maintained in a U.S. territory (e.g. Puerto Rico, Guam, etc.). This could be captured with a plan feature code.
  4. Expand Schedules H, I and financials on 5500-SF to include a line for in-service distributions, instead of on Line 11 on the 5500-SUP.
  5. Use check boxes to collect more specifics regarding the plan's coverage testing, similar to line items on the former Schedule T. The current format leaves out certain exceptions.
  6. Simplify the Form 5500-SUP line 6 questions regarding plan amendments. In its current form, Line 6 questions require interpretation that only an ERISA attorney may be able to answer.
  7. Clarify which types of filers are required to provide the Form 5500-SUP electronically along with how to address late filings. 

We hope the IRS has allowed enough time to review all comments submitted and apply many of the suggestions so completion of the Form 5500-SUP (or Schedule R where these are also expected to appear) can be provided with more clarity and efficiency.

IRS Qualified Plan Fraud Project - Surprising Results

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The Employee Compliance Unit (EPCU) completed one of its first projects for this newly formed group: the Fraud Project. They looked for plans that experienced a loss, reported on the Form 5500, Schedules H and Schedule I, Line 4f. Losses are required to be reported, regardless of whether the loss was recovered by the plan.

The project was set up to ask the following questions of plan sponsors that experienced a loss:
  • How was the loss accounted for by the plan?
  • Was the loss recovered and if so, how?
  • What actions were taken to prevent future plan losses?
  • Did the plan have a fidelity bond and if so, was it for an adequate amount based on plan assets?
This project involved over 800 Form 5500 filings that reported a loss due to fraud. However, after the EPCU contacted plan sponsors, only 13% actually incurred an actual fraud loss. 

The majority of the results, 68%, were due to a line entry error by the preparer. The majority of these errors reported the fidelity bond amount on the fraud/loss line. This is just one example of the importance of accurate Form 5500 completion. The DOL, IRS and PBGC continue to use information on Form 5500 filings to select companies to audit. 
DOL Looking for Cloud Vendors for EFAST2 ERISA Website
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The DOL announced they are looking for a vendor that can provide cloud storage to host the ERISA public disclosure Form 5500 filing website. With over 675,000 retirement plan filings submitted annually, in addition to hundreds of thousands of welfare plan filings, the public disclosure website contains about 12 terabytes of PDF forms and this grows at an estimated rate of 450 gigabytes every year. The DOL wants to move this information to cloud storage. 

 

Interested companies were required to respond by February 4, 2015, by completing the required RFI form so there was not much time to prepare and submit these applications. They were especially interested in small businesses, small businesses owned by disabled veterans and HUBZone small businesses which refers to the 'Historically Underutilized Business Zones' program that helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities.

 

Cloud Support Services

The cloud website is planned to host all the Form 5500 filings that are currently stored on the www.EFAST2 .dol.gov website and to provide basic and advance search features for users including data downloads. The vendor search is only for hosting the website and providing technical support. The managing agency, EBSA, will maintain and improve the site, as needed. The initial contract is expected to last for 12 months.


 

The main purpose is to release a cloud version of the ERISA Public Disclosure System (EPDS), to advance the OMB mandate to consider the cloud first, and the Open Government Initiative which provides for public participation and collaboration.

 

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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!

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 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.