Though proposed changes to the 5500 form required to be filed with the DOL and IRS by employers sponsoring a defined contribution plan like 401(k)s were delayed, experts recommend that plan sponsors take note and use them as a “mini” audit in preparation for then they do take effect. Other experts noted that these changes were proposed to help with regulator’s enforcement efforts in the future.
Changes proposed included:
- Whether the plan incurred unrelated business taxable income.
- Whether in-service distributions were made during the plan year.
- The name and phone number of the plan’s trustee or custodian.
Schedule R changes focused on qualification questions:
- How the plan satisfies the applicable coverage and nondiscrimination tests.
- Whether and when the plan has been amended for required tax law changes.
- The date of the plan’s last favorable determination, opinion, or advisory letter.
Make sure you check with your record keeper, advisor and TPA to determine how these changes might affect you and your plan in the future. Though outside experts usually prepare the 5500, which is different for companies with less than 100 employees known as a 5500-SF, ultimately plan sponsors are responsible for the accuracy of the information in the form they sign.
