Form 5500 Responsibilities: Everything You Need to Know
According to the Employee Retirement Income Security Act (ERISA), plan sponsors of retirement plans need to file an annual report, titled Form 5500, with the Department of Labor (DOL). Here is a quick fact sheet detailing everything you need to know regarding your responsibilities with the Form 5500.
What is the purpose of Form 5500?
The purpose of the Form 5500 is to provide the Internal Revenue Service (IRS) and DOL with information about the plan’s operation and compliance with government regulations.
When do you need to have it completed?
For most plans the Form 5500 is due the last day of the seventh month after the plan year ends, or typically July 31 for a calendar-year plan (or the following business day if July 31 falls on a weekend). If you do not think you'll be able to complete your form by July 31, you'll need to file an extension using a Form 5558.
What is Form 5558?
Form 5558 is "The Application for Extension of Time to File Certain Employee Plan Returns". Just as with a personal tax return, you have the ability to file an extension. If the Form 5558 is filed in a timely and complete manner, the extension is due about two-and-a-half months after your Form 5500 was due.
What is a Summary Annual Report (SAR)?
A summary annual report is a condensed version of the information contained in the Form 5500, which must be distributed to all plan participants. The SAR notifies participants that they have the right to request a copy of the statement of assets and liabilities of the plan.
When do I have to distribute the SAR?
Unless the plan sponsor requests and receives a two-month extension from the IRS (Form 5558), an SAR must be provided to participants by the last day of the ninth month following the end of the plan year. For example, if a business's plan year ends on December 31, the report must be distributed by September 30. If the two-month extension is granted then the SAR must be distributed by December 15.
Help with Form 5500 Preparation
Most often, the retirement plan third-party administrator (TPA) will prepare the Form 5500 on behalf of the plan sponsor. The plan sponsor is then responsible for filing the form.
Don't miss a date or an extension. Check with your provider to keep these important dates on your radar. Read Form 5500 FAQs to learn more.