Few 2002 Changes to PWBA Paperwork

December 10, 2002 (PLANSPONSOR.com) - Employers who sponsor benefit plans will get an added reminder from the 2002 version of the Form 5500 series disclosure documents to sign them before submitting them.

That is one of only a handful of edits to the latest version of the Form 5500 document series, according to John J. Canary, chief of the US Department of Labor’s Pension and Welfare Benefits Administration (PWBA) Coverage, Reporting, and Disclosure Division, Washington-based legal publisher BNA reported.

Speaking at Washington accountants conference this week, Canary said the PWBA had been getting large numbers of unsigned submittals and was trying to make the new form’s signature area more evident.

In addition to the 5500, Canary said the signature change have also been made on:

  • Schedule B (Actuarial Information)
  • Schedule P (Annual Return of Fiduciary of Employee Benefit Trust)
  • SSA (Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits).

In addition, lines 8c and 10c of Form 5500, related to fringe benefits, and Schedule F (Fringe Benefits), were deleted. The Internal Revenue Service (IRS) last April suspended the requirement to file Schedule F.

Schedules H (Financial Information) and I (Financial Information–Small Plans), line 4a, will no longer contain the word “maximum” in the following question: “Did the employer fail to transmit to the plan any participant contributions within the maximum time period described in 29 C.F.R. 2410.3-102?”

The word was removed as a clarification of a PWBA regulatory interpretation, Canary said. The previous wording seemed to indicate that employers would have until the full 15 days allowed under the regulations. In fact they should have been making the participant contribution transmittals as soon as the contributions could be reasonably segregated from the employer’s general assets, Canary said, according to the BNA report.

Small Plan Audit Waivers

Canary also talked about how small plans can arrange for audit waivers. First, 95% of the plan assets must be qualifying plan assets as of the end of the preceding plan year, or persons handling nonqualifying assets must be covered by an ERISA fidelity bond for 100% percent of the value of the assets.

Qualifying assets include:

  • assets held by a bank, insurance company, registered broker-dealer, or other organization authorized to be trustee of an individual retirement account
  • investments in mutual funds
  • insurance company investment and annuity contracts
  • qualifying employer securities under ERISA §407
  • participant loans under DOL regulations
  • assets in accounts over which participants have a reasonable opportunity to control, and where the participants must receive a statement at least annually from the regulated financial institution holding the assets

Secondly, the plan administrator must be required to disclose information in the summary annual report (SAR) and on request to participants and beneficiaries, Canary said.

The SAR must name regulated institutions holding or issuing qualifying plan assets and amounts, and, if applicable, must include information on the fidelity bond for nonqualifying assets, he said.

Direct Filing Entities

Finally, the PWBA official talked about reporting requirements for direct filing entities. Master Trust Investment Account (MTIA) reporting requirements, for example, have been slightly modified, Canary said.

Previously, if an MTIA had several mutual funds, each had to be reported on a separate Form 5500. Finding that this arrangement did not meet PWBA needs, Canary said, the agency “collapsed” the requirement into one 5500.

All participant-directed assets in an MTIA are reportable as a single MTIA if the assets are in individual account defined contribution plans; and the assets are mutual funds, CCTs, insurance contracts, and other assets with current value readily determinable on established market.

All of the forms are expected to be available in .pdf format on  PWBA’s EFAST Web site before the end of the year, Canary said.