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Temporary Penalty Relief for Form 5500 Reporting by Multiple Employer Plans

Thomson Reuters Tax & Accounting  

· 5 minute read

Thomson Reuters Tax & Accounting  

· 5 minute read

The Employee Benefits Security Administration (EBSA) of the Department of Labor (DOL) has announced that it is giving transition relief to multiple employer plans (MEPs) that have failed to file a complete and accurate list of participating employers with their Form 5500 (Annual Return/Report of Employee Benefit Plan) for the 2017 plan year and for plan years before 2017 [EBSA Field Assistance Bulletin 2019-01].

Background.  For any MEP, Form 5500 must include a list of the participating employers in the plan and a good faith estimate of the percentage of total contributions made by each employer during the plan year [ERISA §103(g)]. This obligation applies to plan years beginning after Dec. 31, 201 3(see Payroll Guide ¶20,323).

A November 2014 interim final rule described Form 5500 revisions that implemented the annual reporting changes for MEPs required for reporting contributions made by participating employers.

Form 5500 data reviewed in 2018 found that some MEPs, including those sponsored by professional employer organizations (PEOs), failed to include a complete and accurate list of participating employers with their Form 5500 series return.

Transition relief.  Temporary transition relief will be provided to MEP plan administrators who voluntarily comply with the annual reporting requirements and begin filing accurate participating employer information.

Specifically, a Form 5500 series return filed on behalf of a MEP for the 2017 plan year, or any prior plan year, will not be rejected. EBSA will not seek to assess civil penalties against a plan administrator for those filings solely on the basis that the plan administrator failed to include complete and accurate participating employer information. This is provided that the annual reports filed for the 2018 and subsequent plan years comply with the  ERISA §103(g) reporting requirement.

EBSA is also granting a special filing extension to MEPs for the July 31, 2019 due date for calendar year 2018 Form 5500 filings of up to two and one-half months to file these reports in full compliance with the ERISA §103(g) reporting requirement.

MEPs should check the “special extension” box under Part I, Line D on the 2018 Form 5500 and enter “FAB-2019-01” as the description. Form 5558 (Application for Extension of Time to File Certain Employee Plan Returns) does not need to be filed if using this extension. However, it would need to have been filed by the July 31, 2019 due date for an extension for the 2018 filing.

The relief is available for MEPs that have already filed their 2018 Form 5500 series return, as long as an amended 2018 report that complies with the ERSIA §103(g) reporting requirement is filed by Oct. 15, 2019. 

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