The updated form, which includes improved reporting through pooled employer plans and addresses the provisions of the SECURE Act 2.0, is estimated to reduce overall filing costs for employee benefits plans by $95 million.
The Department of Labor, the Internal Revenue Service, and the Pension Benefit Guarantee Corporation made final changes to the 2023 Form 5500 and Form 5500-SF Employee Benefits Planning Reports this week. This change, which allows for developments such as the Pooled Employer Plan (PEP), could save $95 million in application costs each year.
of Form 5500 series is a compliance, investigation, and disclosure tool that contains information about 401(k) plan financials, plan eligibility, operations, and compliance with government regulations. This is the third and final stage of changes to the form proposed for 2021. This is to comply with all community UP SET (SECURE) laws.
“Form changes and regulatory amendments, especially those related to reporting multi-employer plans, will improve Form 5500 as an important monitoring, publication and policy data tool,” said Lisa M., Assistant Secretary for Employee Benefits and Security. says Gomez.
The Federal Register notifies: Document #2023-02653 Notification of final form revisions and Document #2023-02652 The notice of final rulemaking also includes an appendix describing changes to forms and instructions, as well as an analysis of regulatory impact and administrative burden.
Plan sponsors are generally required to submit 5,500 forms on the last day of the seventh month following the end of the plan year. The 2023 Plan Year Report, due from mid-2024, includes the following changes:
- Consolidated Form 5500 reporting options for certain groups of defined contribution plans, improved reporting with PEPs and other multiemployer plans.
- Changes to participant counting methods to determine eligibility for simplified reporting alternatives available for small plans (typically plans with less than 100 participants).
- A reported breakdown of administrative expenses paid by the plan in the plan’s financial statements;
- Further improvements in financial and funding reporting by defined benefit plans covered by the PBGC.
- Addition of selected Internal Revenue Code compliance questions to improve tax oversight and taxable retirement plan compliance.and
- Technical and conforming changes as part of the annual rollover of forms and instructions.
Technical adjustments have also been made to Federal Register notices to address specific provisions regarding multiple-employer plans in Code Section 403(b) of the SECURE Act 2.0 of 2022. This includes PEPs, minimum required distributions, and audit requirements for plans in defined contribution group reporting schemes.
Form and procedure mockups are available at: reginfo.gov.
Kristen Beckman Freelance writer based in Colorado. She was previously a writer and editor for ALM’s. Retirement Advisor magazine and life health pro online channel.
