The Department of Labor’s Employee Benefits Security Administration (EBSA) on Dec. 29 unveiled final revisions to the Form 5500 and the Form 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan. The revised forms are to be used for reporting concerning the 2021 plan year, and include changes that apply to pooled employer plans (PEPs).
The DOL, IRS and Pension Benefit Guaranty Corporation (PBGC) issued proposed revisions to the Form 5500 on Sept. 14. The changes relate primarily to statutory amendments to ERISA and the Internal Revenue Code made by the SECURE Act. The limited number of instruction changes in these final revisions implement annual reporting changes for multiple-employer plans—including PEPs—that result from Section 101 of the SECURE Act. These revisions are effective for plan years beginning on or after Jan. 1, 2021.
PEPs
The instructions to the 2021 Form 5500 for Part I, Line A (the multiple-employer plan checkbox) are being amended to note that:
- a PEP operated by a pooled plan provider (PPP) that meets the definition under ERISA Section 3(43) is a multiple employer plan (MEP); and
- like other ERISA-covered pension MEPs, a single Form 5500 Annual Return/Report is required to be filed for a PEP.
EBSA contends that it does not impose any meaningful burden on a PPP acting as the plan administrator to acknowledge on the plan’s Form 5500 annual report that it believes to the best of its knowledge that it has fulfilled its statutory registration obligation. Furthermore, the DOL continues to believe that linking the Form PR filed by a PPP to the Form 5500 is a reasonable method to help make sure that workers, retirees and the agencies charged with oversight have the information they need to be sure that the Form PR information is consistent and up to date. In addition, says EBSA, the requirement to report Form PR compliance information on the Form 5500 will also help the DOL to ensure compliance with those registration requirements.
Additional Revisions
The 2021 instructions to the Form 5500 and Form 5500-SF for the MEP check box are amended to require MEPs to include a new data element on the currently required 2021 non-standard attachment, specifically the “Aggregate Account Balances Attributable to Participating Employer” (element 4).
The instructions to the MEP check box currently provide that the Form 5500 filed for an MEP or multiple employer welfare plan must include a non-standard attachment that identifies the participating employers in the plan by name and employer identification number (EIN) and include for each participating employer an estimate of the percentage of total contributions for the plan year made by each employer.
The final instructions for the 2021 reporting year provide that only defined contribution MEPs must report the employer-level aggregate account balances required by the SECURE Act.
In accordance with the SECURE Act provisions that the aggregate account balances information should be determined as the sum of the account balances of employees and their beneficiaries, the final instructions reflect that an end-of-year valuation is an appropriate reporting requirement since it will provide the most up-to-date value for the plan year covered by the Form 5500. EBSA adds that the final instructions have been revised to state that rounding to the nearest dollar, as with the financial reporting on other parts of the Form 5500 and schedules, would be appropriate.
More to Come
EBSA says that it will issue additional notices concerning other changes to the Form 5500 included in the September 2021 proposal.
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