Generally, all qualified retirement plans subject to ERISA must file an annual report summarizing the plan’s investments and overall financial condition. The plan administrator satisfies this requirement by filing IRS Form 5500. But which version of Form 5500 — including its many schedules — to file depends on the plan’s size.
Determining Plan Size Status
To determine if your plan is a small or large plan filer, review your participant count at the beginning of the plan year. If the count is 99 or less, you can file as a small plan. If your count is 100 or more, you’re considered a large plan filer.
There is an exception: Plans may not always be considered small or large based on current year numbers under the 80/120 rule. Under the rule, plans can still file as small plans if they filed as a small plan in the previous year.
For example, suppose a plan has 80 employees in 2008; 117 in 2009; 126 in 2010; 115 in 2011; 110 in 2012; and 99 in 2013. In this example, the plan was able to file as a small plan filer in 2009 even though the participant count was over 100 because it had filed as a small plan in the prior year. When the participant count goes over 120, however, the plan can no longer file as a small plan. Because the exception didn’t apply in 2010, the plan is ineligible for the exception in 2011 or 2012, even though the plan had fewer than 120 employees. The plan is eligible to file as a small plan if the participant count falls below 100 at the beginning of the plan year; thus, it can file as a small plan filer in 2013.
Filing Requirements for all Plans
Generally, all plans must file certain forms. (See the sidebar “Plans exempt from annual filing.”) For example, plans must file one of the three versions of Form 5500:
- Form 5500 (“Annual Return/Report of Employee Benefit Plan”) for plans with 100 or more participants,
- Form 5500-SF (“Short Form Annual Return/Report of Small Employee Benefit Plan”) for one-participant plans and plans with 99 or fewer participants, or
- Form 5500-EZ (“Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan”) for one-participant plans only.
In addition, a plan administrator needing a filing extension must file Form 5558 (“Application for Extension of Time to File Certain Employee Plan Returns”). And plans that have separated participants with deferred vested benefits must file Form 8955-SSA (“Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits”).
Small Plan Requirements
Form 5500 has several schedules that both small and large plans must complete. Small plans must complete Schedule I (“Financial Information — Small Plan”) and Schedule R (“Retirement Plan Information”). If your plan has insurance contracts, you’ll need to complete and file Schedule A (“Insurance Information”).
Single-employer or multiple-employer defined benefit plans, including eligible combined plans, and money purchase plans subject to minimum funding standards must file either Schedule MB (“Multiemployer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information”) or Schedule SB (“Single-Employer Defined Benefit Plan Actuarial Information”). Additionally, a small plan may need to file Schedule D (“DFE/Participating Plan Information”).
Large Plan Requirements
In addition to filing Form 5500, large plans must submit an accountant’s audit report. Some pension plans with 99 or fewer participants also may be required to have an audit if they fail to meet certain conditions relating to their plan investments, bonding, and disclosure requirements.
Large plans generally need to file many of the same Form 5500 schedules filed by small plans. This includes Schedules A, D, MB, R and SB. Other potentially required Form 5500 schedules include Schedule C (“Service Provider Information”), Schedule G (“Financial Transaction Schedules”) and Schedule H (“Financial Information”).
File On Time
The filing deadline for Form 5500 is July 31 for calendar year plans. Plans must file either Form 5500 or 5500-SF electronically through EFAST2. File Form 8955-SSA electronically through the IRS FIRE system (no electronic signature is needed), and mail Form 5558 to the Department of the Treasury, IRS.
Plans Exempt From Annual Filing
Not all plans — whether small or large — must file an annual IRS Form 5500. For example, governmental plans, unfunded excess benefit plans and church pension benefit plans not electing coverage under Section 410(d) don’t have to file.
Certain unfunded, fully insured (or a combination of insured and unfunded) welfare benefit plans covering 99 or fewer participants at the beginning of the plan year also don’t have to file. In addition, some Savings Incentive Match Plans for Employees (SIMPLEs), Simplified Employee Pension (SEP) plans and salary reduction SEP plans don’t have to file.
Many one-participant plans don’t have to file, but certain one-participant plans must file Form 5500-EZ (“Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan”) with the IRS or, if eligible, may file Form 5500-SF (“Short Form Annual Return/Report of Small Employee Benefit Plan”) electronically with EFAST2. Pension plans maintained outside the United States primarily for the benefit of persons, substantially all of whom are nonresident aliens, don’t have to file Form 5500. However, certain foreign plans must file Form 5500-EZ with the IRS. This list doesn’t cover all plans that don’t have to file an annual report.
A complete list is found at http://www.dol.gov/ebsa/pdf/2013-5500inst.pdf.