A Sneak Peek at the 2003 Form 5500

The 5th Annual Software Developer Conference was hosted by EFAST and DOL on Thursday, December 4, 2003 in New Orleans. This program provides the opportunity for software vendors to meet with the folks on the receiving end of the forms in an effort to make the filing of Form 5500 more error-proof. It also gives us a chance to provide input about future enhancements to the forms and the processing software.

We learned something very interesting....namely, that EFAST already is busy processing filings received on October 16, 2003! This is far earlier than ever before and is evidence that many of the processing difficulties have been overcome. For those of us who presented filings without audit reports, we should expect to hear from DOL very soon about this deficiency!

On the positive side, it appears that DOL has become more generous with its reasonable cause policy. In part, this has resulted from their efforts to perfect their database and deal with processing problems. It’s my understanding that no late filing penalties have been assessed by DOL since they began processing filings using EFAST. Of course, there is no guarantee that DOL will stay in this mode.

What follows is preliminary information about the 2003 filings that I gleaned during the presentations. EFAST had released the final versions of the forms, but not the instructions, shortly before the meeting.

• IRS will no longer mail booklets to plan sponsors. Instead, post cards will be mailed to plan sponsors explaining how to get forms. No booklets are being printed so if you call for forms, be sure to be specific about any schedules you need.
  
  
• The feature codes on lines 8a and 8b of Form 5500 have been expanded to include two new codes:
  • Code 3I will identify a pension plan - either defined contribution or defined benefit - that requires contributions be invested and held in employer stock.
  • Code 4U is used to report a collectively bargained welfare benefit arrangement under IRC §419A(f)(5).
    
    
• Instructions to Schedule B will have several changes. Line 4a (for quarterly contributions) is modified for new plans; line 8c instructions and Schedule of Active Participant Data are modified to incorporate average cash balance account data; and line 9l(2) reporting current liability full funding limitation will be based on 170% of current liability.
  
  
• Schedule E has been altered so that line 1 reflects information shown on the former line 17, and subsequent line numbers have been adjusted accordingly.
  
  
• Schedule H has a very logical change in Part III, Line 3. The lines have been reordered to clarify accountant’s opinion information..
  
  
• Also relating to Schedule H, information on delinquent contributions that is reported on line 4a is no longer required to also be reported on line 4d or in Part III of Schedule G..
  
  
• Schedule SSA instructions note that you are permitted to report additional separated participants on attachments for the 2003 plan year filing; however, this will not be allowed for 2004. By giving us notice of this now, the agencies believe we should have adequate time to adjust our data collection procedures.