DOL Field Assistance Bulletin Offers Multiple Employer Plans Limited Relief From Form 5500 Participating Employer Information Requirement

The DOL has released a Field Assistance Bulletin (FAB) providing transitional relief from certain filing requirements for multiple employer plans. As background, ERISA § 103(g) requires Form 5500 annual reports filed for multiple employer plans to include an attachment identifying participating employers and providing an estimate of each participating employer’s contributions during the year. This requirement first took effect with the 2014 Form 5500 (see our Checkpoint article). It applies to both welfare and pension plans (whether filing Form 5500 or Form 5500-SF), except that multiple employer welfare plans that are exempt from filing financial statements with Form 5500 are excused from providing contribution estimates.

According to the FAB, a “substantial number” of filers have not fully complied with this reporting obligation, and professional employer organizations (PEOs) have specifically objected to the costs and burdens it imposes, as well as the public nature of the disclosures. Examples of non-compliant filings include replacing participating employer names with abbreviations, initials, or other labels (e.g., “Client 1”); reporting only the last four digits of the EIN; simply saying “details available on request”; and listing the PEO as the only participating employer. Acknowledging the objections of PEOs and their representatives (and noting that it considered similar objections in connection with proposed changes to Form 5500; see our article), the DOL explains that it does not believe it has the authority to treat the required information as nonpublic or confidential because (aside from an inapplicable exception) ERISA provides that the contents of Form 5500 “shall be public information” open for inspection.

The FAB provides that the DOL will not reject Form 5500 filings for 2017 and prior plan years, or seek to impose penalties for such filings, solely due to a failure to include complete and accurate participating employer information. But this relief is available only if the plan’s Form 5500s for 2018 and future plan years provide the necessary information, including a complete and accurate list of participating employers identified by name and EIN, and applicable contribution information. In light of the July 31, 2019, deadline for filing Form 5500s for calendar-year plans, the FAB grants an automatic 2-1/2 month extension to affected filers, which can be claimed by checking the “special extension” box on Form 5500 Part I Line D and entering “FAB 2019-01.” (This automatic extension is available without filing a Form 5558 application for extension; if used, Form 5558 must be filed by the normal Form 5500 due date.) For filers that have already filed their 2018 Form 5500, the relief is available if a compliant amended 2018 Form 5500 is filed by October 15, 2019.

EBIA Comment: The FAB specifies that, prospectively, full compliance with the participating employer reporting requirement is expected. It appears the DOL’s patience with noncompliance on this issue is wearing thin; this may be an instance where it exercises its discretion to impose relatively high penalties (see our Checkpoint article). Plan sponsors, administrators, and advisors working with multiple employer plans, both pension and welfare (including multiple employer welfare arrangements (MEWAs)), should pay close attention to this filing obligation. For more information, see EBIA’s ERISA Compliance manual at Section XXII.H (“Completing Form 5500 Main Body”) and EBIA’s 401(k) Plans manual at Section XXXI.E (“Completing the Form 5500”).

Contributing Editors: EBIA Staff.