Digital Filing Mandate - E-Filing Is Now Mandatory For Employee
The Department of Labor (DOL) has crossed the fine line between offering
online services and mandating online services. It’s happening this
year with Form 5500, Annual Report/Return for Employee Benefit Plans.
The form must be filed each year by more than 1 million retirement
and other employee benefit plans to satisfy annual reporting requirements
under the Employee Retirement Income Security Act (ERISA) and the
Internal Revenue Code.
Effective Jan. 1, 2010, all Form 5500 filings, including all schedules
and any required attachments for 2009 and all future plan years,
must be completed and submitted electronically. This can be accomplished
either by using approved third-party software, and with your third-party’s
assistance, submitting Form 5500 through the EFAST2 all-electronic
filing system, or by individually preparing and submitting Form
5500 directly through iFile, the EFAST2 Web-based filing system.
The only exception to this mandate is Form 5500-EZ, the form for
single-participant plans, which will continue to be filed on paper
in order to avoid releasing personal information to the public.
Using the same reasoning, the form previously known as Schedule
SSA, which reports future benefits due to terminated participants
to the Social Security Administration, will also be filed on paper
for 2009. Schedule SSA is filed directly with the IRS as a separate
filing from Form 5500.
Also beginning Jan. 1, 2010, the delinquent and amended filings
of plans must be submitted electronically through EFAST2, and cannot
be submitted on paper through the previous EFAST system. A limited
exception is available for delinquent and amended 2008 plan year
filings. Form 5500 annual returns and reports for 2008 (including
delinquent or amended 2008 returns and reports) can still be filed
electronically using the original EFAST system through June 30,
2010, or on paper through Oct. 15, 2010.
Form 5500 is an important compliance, research and disclosure tool
for the DOL, a disclosure document for plan participants and beneficiaries,
and a source of information and data for use by other federal agencies.
It is part of ERISA’s overall reporting framework, which is intended
to assure that employee benefit plans are operated and managed according
to certain standards.
The DOL has stated that it is committed to this process, and that
there will be no exceptions.
What to Do Now
The DOL mailed postcards to sponsor organizations in early January
to provide information about a Web site where responsible individuals
(plan fiduciaries) can register for signing credentials. Individuals
may now register for signing credentials on the DOL Web site at
www.efast.dol.gov. Select “Register” in the toolbar on the left
side of the page and follow the directions.
While there may be multiple authorized signers for one plan, it
is important to note that the personal identification number (PIN)
and password are for a single individual (plan fiduciary), who must
agree in an affidavit not to share the credentials with anyone else.
Only one set of credentials will be issued to an e-mail address,
so no one will be able to secure the credentials on behalf of the
Plan representatives should ensure that each person in the sponsor
organization who signs the Form 5500 has Internet access and a valid
e-mail account. If Internet access is not available, the DOL suggests
visiting a local library or other facility that makes online services
available to the public.
Shortly after filing the return, the person who submitted the form
will receive an acknowledgement advising whether the return was
accepted as filed, or given a list of errors that must be corrected
by filing an amended return. Accepted returns will then be made
available to the public on the DOL Web site, possibly within minutes
of submitting. Now more than ever, it is important to file accurate
and timely information. The new electronic filing system will also
be able to generate penalty notices within minutes of submission.
For more on new electronic filing requirements for employee benefit
plans, contact your local Clifton Gunderson office, call
1-888-CPA-FIRM or visit www.cliftoncpa.com.