Filing IRS Form 5500 requirements for qualified retirement plans

Meeting IRS Form 5500 requirements for qualified retirement plans

The due date for filing Form 5500s for calendar year plans is rapidly approaching. Qualified retirement plans (ERISA Plans) are required to file Form 5500s by the end of the seventh month after the plan year ends, which is July 31, 2022 for 2021 calendar year plans. There are three versions of the Form 5500 that can be filed based on employer and plan characteristics.

Short Form 5500-SF

• Used by small plans with less than 100 participants on the first day of the plan year IF all the investments are held in easily valued investments AND do not hold employer stock.
• If the Form 5500-SF was used in the prior year, plans can continue to use it if the participant count is more than 100 but less than 121 under the “80-120” rule. Using the “80-120” rule for small plans with an increasing headcount can delay the need for a plan audit and the associated expense.

Form 5500

• Used by large plans with over 100 participants. An audit report prepared by an independent qualified public accountant must be attached to the filing.
• Small plans with “non-qualifying” assets must also file the longer Form 5500 but may be exempt from the audit requirement by increasing the bond amount and including additional disclosures on the Summary Annual Report for participants.

Form 5500-EZ

• Used by one-participant plans, which cover only owners and their spouses (but not their children).
• If plan assets exceed $250,000 these plans must file a Form 5500-EZ. If the owner has multiple plans, the assets from all plans are combined to determine if the $250,000 threshold applies.
• One-participant plans must file the Form 5500 in the final plan year regardless of the amount of assets.

More Deadline Details

• An extension of 2 and a half months can be requested by filing a Form 5558 by the regular deadline.
• If a plan year and the employer’s fiscal year align and the employer files an extension to its tax return, the Form 5500 filing deadline is automatically extended to the same date.
• Plans with employees must distribute to participants a summary of the Form 5500, called a Summary Annual Report, within two months after the 5500 due date.
• If an ERISA plan misses a filing deadline, the error can be corrected using the Delinquent Filer Voluntary Compliance program to file the late return and pay a maximum penalty of $750 for small plans and $2,000 for large plans—much less than the Department of Labor penalties, which can be up to $2,259 per day.

The IRS has more information about Form 5500.

About Ameritas

Ameritas is a marketing name for Ameritas Mutual Holding Company and its affiliated subsidiary companies, including Ameritas Life Insurance Corp. and Ameritas Life Insurance Corp. of New York. Founded in 1887, Ameritas offers a wide range of insurance and financial products and services to individuals, families and businesses. These products and services include life insurance; annuities; individual disability income insurance; group dental, vision and hearing care insurance; retirement plans; investments; asset management; and public finance. Securities offered through affiliate Ameritas Investment Company LLC., member FINRA/SIPC and investment advisory services offered through the business name of Ameritas Advisory Services.