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Benefits

Agencies Release 2021 Form 5500 Series With Instruction Changes Finalized by DOL

EBIA  

EBIA  

2021 Form 5500, Schedules, and Instructions; Revision of Annual Information Return/Reports, 29 CFR Part 2520, 86 Fed. Reg. 73976 (Dec. 29, 2021)

Form 5500 Series

Final Forms Revisions

News Release

The DOL, IRS, and PBGC have released informational copies of the 2021 Form 5500 series, including schedules and instructions. The 2021 instructions include certain changes that the DOL proposed in September 2021 (see our Checkpoint article) and has now finalized. The final changes reflect provisions of the Setting Every Community Up for Retirement Enhancement (SECURE) Act (see our Checkpoint article) that are first effective for 2021 plan years and relate to filings by multiple employer plans (MEPs). MEPs are now subject to employer-by-employer account balance reporting under ERISA § 103(g) and, if they are pooled employer plans (PEPs), must provide certain information about the pooled plan provider. The MEP-related changes are set forth in the instructions for Part I, Line A, “Box for Multiple Employer Plan”; here are highlights of interest to welfare and 401(k) plan filers:

  • Multiple Employer Pension Plans. All pension plan MEPs (defined contribution and defined benefit plans) must include the Multiple-Employer Plan Participating Employer Information attachment (MEP attachment) and complete columns one through three (participating employer’s name, EIN, and percentage of total contributions). The instructions for the attachment add rounding rules and a fourth column for reporting the aggregate year-end account balances attributable to each participating employer. Only defined contribution plan MEPS must complete column four. The MEP attachment must be filed whether the MEP files Form 5500 or Form 5500-SF.
  • Pooled Employer Plans. The instructions clarify that PEPs are also MEPs and must check the box indicating MEP status and provide the information required by the MEP attachment. In addition, a PEP must indicate whether the pooled plan provider is in compliance with the requirement to file Form PR (Pooled Plan Provider Registration Statement) and must furnish the provider’s AckID for the most recent Form PR filing. (An “AckID” is the acknowledgement code generated by the registration system for pooled plan providers.) This information may be added to the MEP attachment or provided as a separate attachment. A new template for the separate attachment is included in the revised Form 5500 instructions (PEPs may not file Form 5500-SF).
  • MEWAs. The instructions continue to require that multiple employer welfare arrangements (MEWAs) include the MEP attachment, but MEWAs that are exempt from including financial statements with Form 5500 (generally those that are unfunded, fully insured, or a combination) only need to provide each participating employer’s name and EIN. The preamble to the final forms revisions states that, while ERISA § 103(g) as amended by the SECURE Act technically does not apply to welfare plans, the DOL believes that collecting participating employer information from MEWAs is authorized and serves an important oversight function.

In addition to the MEP-related changes, the forms and instructions have been revised to require plans to report if they were retroactively adopted as permitted by the SECURE Act. The instructions have also been updated throughout to reflect the current maximum penalty for Form 5500 filing failures ($2,259 per day), noting that this penalty may soon increase (see our Checkpoint article).

EBIA Comment: The preamble to the DOL’s action finalizing its revisions to the 2021 instructions notes that other changes in the September 2021 proposal—i.e., those with later effective dates—will be finalized later in one or more separate actions. As a reminder, the informational copies of Form 5500 cannot be used for filing; Forms 5500 and 5500-SF must be filed electronically. (Only one-participant plans and certain foreign plans may still file on paper using Form 5500-EZ.) For more information, see EBIA’s 401(k) Plans manual at Section XXXI (“Plan Administration: Annual Form 5500 Reports and SARs”) and EBIA’s ERISA Compliance manual at Section XXII (“Annual Form 5500 Reporting to the DOL”). See also 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.

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