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Are Plan Administrators Required to Obtain Electronic Credentials Under the DOL’s EFAST-2 Form 5500 Filing System?

EBIA  

EBIA  

QUESTION: We will be using a third-party preparer and approved third-party software to submit our Form 5500 under the DOL’s EFAST-2 electronic filing system. As the plan administrator, do we need to obtain electronic credentials?

ANSWER: Plan administrators must obtain electronic credentials for Form 5500 filing unless they decide to use the e-signature option (described below). Form 5500 series filings generally must be filed electronically using EFAST2, the DOL’s all-electronic, web-based system for filing Form 5500s. (There is a limited exception for certain Form 5500-EZ filings.) Under EFAST2, a Form 5500 can be prepared and submitted (referred to as a transmission) by a third-party preparer, but it must be signed by the plan administrator. As explained in the Instructions to Form 5500, any form not signed electronically by the plan administrator will be subject to rejection and civil penalties.

The plan administrator must register online for a “filing signer” credential, which will allow the plan administrator to sign Form 5500 electronically. If the plan administrator is an entity, the electronic signature must be in the name of a person authorized to sign on behalf of the entity. If the plan administrator is also the plan sponsor, only one registration is necessary.

Third-party preparers cannot register for filing signer credentials on behalf of their clients; rather, the person signing electronically must be the person registering for credentials. The process of obtaining filing signer credentials involves completing basic contact information on the EFAST2 website to create a user ID, PIN, and password. The user ID and PIN serve as the filing signer’s signature on the electronic filing, while the user ID and password are used for accessing certain parts of the EFAST2 website.

The DOL takes the position that a plan administrator (or other filing signer) cannot simply share its PIN with a third-party preparer so that the preparer can sign and submit the Form 5500 on the administrator’s behalf. This is because the filing signer is responsible for reviewing a filing before it is submitted and ensuring that the information included in the filing is correct. The filing signer’s signature indicates that this step has been completed and that, to the best of the signer’s knowledge and belief, the filing is “true, correct, and complete.” Therefore, PINs must be protected and should not be shared.

However, the DOL has provided an e-signature option that allows a third-party preparer to sign and submit a Form 5500 on behalf of a plan administrator using the preparer’s own EFAST2 signer credentials. This method requires the plan administrator’s written authorization, and the electronic filing must include a PDF copy of the first two pages of the plan’s Form 5500, manually signed and dated by the plan administrator. In addition, the preparer must advise the plan administrator that the manual signature will be part of the Form 5500 that is posted by the DOL on the internet for public disclosure. Other requirements for using this e-signature option are outlined in DOL FAQ guidance.

For more information, see EBIA’s ERISA Compliance manual at Section XXII.G (“Filing Form 5500”); see also EBIA’s Cafeteria Plans manual at Section XXXIV.B (“Basic Form 5500 Rules: Who, When, What, and How”) and EBIA’s 401(k) Plans manual at Section XXXI.C (“Electronic Filing of Form 5500 Required”). You may also be interested in our upcoming webinar, “Form 5500 for Health and Welfare Plans: Preparation and Filing (live on May 6, 2021).

Contributing Editors: EBIA Staff.

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