Form 5500-EZ and Form 5500 Filing
Below is a list of Atlantic Financial's 401k plan services. We also offer
bundled, turn key plans through many of America's top mutual fund companies.
Form 5500-C/R and related schedules
Summary annual report
Top heavy test
Benefit distribution test
The valuation report providing aggregate review of the plan's earnings,
contributions and participant census.
Additional Discrimination Testing, mid year
Combination of Profit Sharing Feature for 401k Plans
Additional Top Heavy Testing
Loan charged to participant for each loan
Toll Free telephone and Internet access for trustees and plan participants
Employee education materials
Individual financial planning for participants
ERISA Investment Compliance Assistance
Contact Atlantic Financial
for more information.
Form 5500 Filing Tips from the IRS
The Department of Labor
(DOL), the Pension Benefit Guaranty Corporation (PBGC)
and the Internal Revenue Service (IRS) have compiled the following practical,
common sense tips for some of the most frequently occurring Form 5500 filing
problems. Hopefully these tips will reduce the number of basic filing errors
encountered when processing the
5500-EZ returns, and also help you avoid getting EFAST correspondence
regarding these basic mistakes. You can get more information in the DOLs
Trouble Shooter's Guide to Filing the ERISA
Annual Report (Form 5500). Also, filers with questions can call the
EFAST Help Line at 1-866-463-3278 (toll-free).
An Important Reminder for Fringe Benefit Plans
The Internal Revenue Service reminds employers that they no longer have to
file an annual Form 5500 and Schedule F for so-called pure fringe benefit plans
1. Employers who in the past filed Form 5500 and the Schedule F (Fringe
Benefit Plan Annual Information Return, solely to meet the reporting
requirements of Internal Revenue Code section 6039D ("fringe benefit plans"),
should file neither Form 5500 nor Schedule F. In fact, the Schedule F has been
eliminated and the Form 5500 has been modified so fringe benefit plan
information cannot be reported.
2. Fringe benefit plans are often associated with ERISA group health plans
and other welfare benefit plans. The IRS announcement regarding fringe benefit
plans does not cover these associated welfare plans. But, in many cases, a Form
5500 was not required for the welfare plan because it was exempt from filing a
Form 5500 report under Department of Labor regulations. For example, fully
insured or unfunded welfare plans covering fewer than 100 participants at the
beginning of the plan year are eligible for a filing exemption. Unless exempt,
however, ERISA welfare plans must still file in accordance with the Form 5500
instructions on welfare plan filing requirements.
3. See IRS News Release No. IR 2003-89 and the Form 5500 instructions for
The Form 5500 Must Be Properly Signed and Dated
1. Failing to sign the form is the number one reason that filers receive
correspondence from the government regarding their Form 5500 or Form 5500-EZ.
Make sure that you have the proper signatures and dates on the Form 5500, Form
5500-EZ, and any attached schedules that require a signature (Schedules B, P and
The type of plan or DFE filing the Form 5500 determines who is
required to sign the form.
Please consult Section 4 of the Instructions
for Form 5500, under the heading "How to File", for information on who is
required to sign your return/report.
Remember, if you choose to file electronically, the plan must keep in
its records an original copy of the Form 5500 filing with all required
The Form 5500 Must Have the Proper EIN and Plan Number (PN)
It is critical that the Employer Identification Number (EIN) used to
identify the plan sponsor be the same year to year when completing line 2b of
the Form 5500 or Form 5500-EZ.
Switching EINs without reporting the change
on line 4 of the Form 5500 or Form 5500-EZ will disrupt proper processing of
your form and cause correspondence with the filer. Also, the same EIN must go on
Line D of all the attached schedules (except Schedule P which reports the EIN of
the plans employee benefit trust(s) or custodial account(s)).
A multiple-employer plan or plan of a controlled group of
corporations should select one of the participating employers to list as the
plan sponsor and use that employers EIN on line 2b.
If the plan sponsor is
a group of individuals (e.g., a board of trustees of a collectively bargained
plan) get a single EIN for the group.
In the case of a Form 5500 filed for
a Direct Filing Entity (DFE), use the EIN assigned to the CCT, PSA, MTIA, 103-12
IE or GIA.
The three-digit plan number (PN), in conjunction with the EIN, is
used as a unique 12-digit number to identify the plan or DFE.
EINs are obtained from the IRS, the plan sponsor/employer or plan administrator
assigns the PN.
Also, once a three-digit plan number and your EIN is used
for one plan or DFE it cannot be used for any other of your plans or DFEs, even
after the plan or DFE terminates.
Plan administrators, plan sponsor/employers and DFE sponsors should
assign PNs as follows.
Plans providing pension benefits (such as
profit-sharing or money purchase plans) should be assigned plan numbers starting
with 001 and consecutive numbers should be assigned to other pension plans
(e.g., 001, 002, 003, etc.).
The sponsor of an MTIA, CCT, PSA or 103-12 IE
filing as a DFE should also start with number 001 and consecutive numbers should
be assigned to other DFEs of the sponsor.
Welfare plans and group
insurance arrangements (GIAs) filing as DFEs should be assigned plan numbers
starting with 501 and consecutive numbers should be assigned to other welfare
plans and GIAs (e.g., 501, 502, 503, etc.).
Do not use 888 or 999 as a PN.
Consult the Form 5500 filing instructions
for line 1b and 2b in
Section 6, Line-by Line Instructions, for additional information on EINs and
The instructions for Line 2b include information on how to obtain
EINs from the IRS.
Do Not File a Form 5500 as a "Final Return/Report"
Do not file a Form 5500 as a final return/report if the plan has
assets, liabilities or participants at the end of the plan year.
Even if you consider a plan to have been terminated, a Form 5500
and all necessary schedules are required to be filed until all assets have been
distributed to the participants, legally transferred to the control of another
plan, or reverted to the employer; and all liabilities for which benefits may be
paid under a welfare benefit plan have been satisfied.
Except as noted
below for certain defined benefit pension plans, a plan should not check the
final return/report box on Line B(3) of the Form 5500 and report having
participants at year-end on Line 7 of the Form 5500 or report having assets and
liabilities at the end of the year on the Schedule H or I.
If a trustee is appointed for a terminated
defined benefit plan
subject to ERISA section 4042, the last year for which a return/report must be
filed is the year in which the trustee is appointed.
For the final
reporting year, check the final return/report box on line B(3) of the Form 5500,
report the number of participants at yearend on line 7 on the Form 5500, enter
Code 1H on line 8a of the Form 5500, and report the value of the assets and
liabilities at the end of the year on the Schedule H or I, as applicable.
A welfare plan that does not expect to file a Form 5500 for the next
plan year because the plan has become eligible for the Form 5500 filing
exemption for small unfunded, insured or combination unfunded and insured
welfare plans should not check Line B(3) on the Form 5500 but should enter Code
4R on line 8b.
Please refer to the Form 5500 filing instructions
in section 4
under the heading "Final Return/Report" and in section 6 regarding Line B(3) for
Use a Proper Business Code When Completing Line 2d of the Form 5500
On Form 5500, Line 2d, be certain to enter a valid business code that
best describes the nature of the plan sponsor's business.
The only business codes that are valid for use in answering Line 2d
are listed in the Form 5500 filing instructions section marked Codes for
Principal Business Activity.
If more than one employer and/or employee
organization is involved, the business code for the main business activity of
the employers and/or employee organizations should be entered.
Business codes may change from year to year.
business code used for your last years filing may not be a valid business code
for the current year filing.
You should select the appropriate business
code from the Form 5500 filing instructions section marked Codes for Principal
Business Activity (e.g., if filing a 2002 Form 5500, the business code you
select should be one of the business codes from the 2002 instructions).
Use the Correct Plan Characteristics Codes on Line 8 of the Form 5500
On Form 5500, Line 8, you must check box A and/or B to indicate if
the plan is providing pension benefits and/or welfare benefits.
After indicating which benefits are being provided by checking box A
and/or B, you must enter the Plan Characteristics Codes in the space provided
beneath boxes A and/or B.
These codes describe the type of pension and/or
welfare benefits provided and other features of the plan.
A list and
description of the Plan Characteristics Codes is in Section 6 of the
Instructions for Form 5500.
An individual account pension plan like a money purchase plan or
profit-sharing plan (including a 401k arrangement) should enter on Form 5500
line 8 the appropriate Defined Contribution Pension Features and Other Pension
Benefit Features codes that are listed in the Form 5500 instructions.
Individual account plans would not normally enter codes for Defined Benefit
Pension Features, such as 1A, 1B, or 1C.
Properly Identify the Funding and Benefit Arrangements on Line 9 of the Form
Indicate all the proper Funding and Benefit Arrangements on Form
5500, Lines 9a and 9b.
The Funding Arrangement is the method used for the
receipt, holding, investment, and transmittal of plan assets prior to the time
the plan actually provides benefits.
The Benefit Arrangement is the method
by which the plan provides benefits to participants.
Be careful to indicate all the applicable Funding and Benefit
Arrangements. The responses on Lines 9a and 9b are cross-referenced against
information on Schedules H, I, and/or A, as appropriate.
Be careful to
attach the appropriate financial or insurance schedule (H, I, A) that
corresponds to the Benefit and Funding Arrangements you indicate.
instance, if "Trust" is indicated as an Arrangement, then a Schedule H or I (as
appropriate) should be submitted with the Form 5500.
Likewise if you
indicate "insurance" as a Funding and/or Benefit Arrangement, a Schedule A
should be filed with Form 5500 for any insurance contract with a contract or
policy year that ended with or within the plan year.
Please refer to the Form 5500 filing instructions, section 6
"Line-by-Line Instructions", for a description of the Funding and Benefit
Schedules Attached to Your Filing Must Match What You Report on Line 10 of
the Form 5500
The information you enter in the checklist on line 10 of the Form
5500 must match schedules that are submitted with the Form 5500.
check a box indicating that a schedule is attached, the schedule must be
submitted with your Form 5500.
If you are filing Schedules A, P, or T, take special care to enter
the total number of each schedule you are filing in the spaces provided on Line
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