Form 5500 discloses financial and compliance information about welfare benefit plans, including health insurance, life insurance, disability benefits, and other non-pension benefits provided to employees. Plans with 100 or more participants are generally required to file, while plans with less than 100 participants are exempt from filing. It’s important to note that the threshold is based on plan participants, not the company’s number of employees. Form 5500 is due within seven months after the end of the plan year, but an automatic two-and-a-half-month extension can be obtained.
Several updates have been made to the reporting requirements for plan years beginning on or after January 1, 2023. Changes were in response to the passage of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). A summary of updates include:
- Schedule DCG: This is a new option for filing consolidated returns for plans that participate in a “defined contribution group.”
- Participant Counting Method for Audits of Defined Contribution Plans: Plans with fewer than 100 participants are exempt. To determine the 100-participant threshold for defined contribution plans, consider only those participants with an account balance at the beginning of the plan year.
- Schedule H: Updated to include new categories for administrative expenses, such as actuarial, audit, and valuation/appraisal fees.
- Schedule MEP: This new schedule has been added to disclose information regarding multiple employer plans.
- Schedule R: This includes several new IRS tax compliance questions.
Failure to comply with filing requirements may result in significant civil penalties. If you need assistance or have questions, please contact your WG representative.
