2018 Form 5500, Schedules, and Instructions; Form 5558
The DOL, IRS, and PBGC have released advance information copies of the 2018 Form 5500 series, including Schedules and Instructions. (As a reminder, these copies cannot be used for filing; with very limited exceptions, Form 5500 must be filed electronically.) Here are highlights of changes relating to welfare and 401(k) plan filings:
Participant Counts. The Instructions now specify that, for Line 6 (Number of participants at the end of the plan year), welfare plans should complete only elements 6a(1), 6a(2), 6b, 6c, and 6d. (There was already a note to this effect on the Form.)
Schedule R. Revised Instructions for Schedule R add a second situation in which the schedule should not be completed, reflecting the removal of certain IRS compliance questions after 2016. Schedule R should not be completed if all six specified requirements are met, including that no reportable plan benefits were distributed during the year and no specified benefits were paid during the year other than by the plan sponsor or plan administrator. The Instructions explain that this last condition for avoiding Schedule R is not met if payments were reportable on Form 1099-R.
Annually Adjusted Penalties. The Instructions have been updated throughout to reflect the current maximum penalty for Form 5500 filing failures ($2,140 per day). Filers are also reminded to check for increases, as required annual adjustments take place after these forms and schedules have been published (see our Checkpoint article).
Plan Characteristics Codes. The description for Plan Characteristic Code 3D (used in completing lines 8a and 8b) has been revised to reflect changes to the pre-approved plans process (see our Checkpoint article) by deleting the references to master, prototype, and volume submitter plans.
Principal Business Codes. The list of principal business activity codes (used to complete line 2d) has been updated to reflect changes to the North American Industry Classification System—the standard on which the Form 5500 list is based.
Separately, the IRS has issued an updated version of Form 5558 (Application for Extension of Time To File Certain Employee Plan Returns). Form 5558 can be used to request an extension for Form 5500, Form 8955-SSA (Annual Registration Statement Identifying Separate Participants With Deferred Vested Benefits), or Form 5330 (Return of Excise Taxes Related to Employee Benefit Plans). While no substantive changes have been made to the Form, the Instructions now specify that a separate Form 5558 must be used to request an extension of Form 5330; that extension cannot be combined with an extension request for the other forms.
EBIA Comment: Although the changes to Form 5500 for 2018 are not extensive, those responsible for filing should review the updated Instructions carefully to ensure complete and accurate filing of Form 5500 and any necessary Schedules. For more information, see EBIA’s ERISA Compliance manual at Section XXII (“Annual Form 5500 Reporting to the DOL”), EBIA’s 401(k) Plans manual at Section XXXI (“Plan Administration: Annual Form 5500 Reports and SARs”), EBIA’s Cafeteria Plans manual at Section XXXIV (“Form 5500 and Other Reporting Requirements”), and EBIA’s Self-Insured Health Plans manual at Section XXIX.B (“Annual Form 5500 Reporting”).
Contributing Editors: EBIA Staff.