What Responsibilities and Liabilities Come With Signing The Form 5500?

Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.

I am the new general manager of our 501(c)(4) homeowners association, an employer eligible to sponsor an ERISA plan; and have been asked to sign the 5500 for our 401(k) plan for our employees. The association is small and has nowhere near 100 participants, so I’ve been asked to sign the 5500-SF. However, even in signing that form, I am concerned about any responsibilities and liabilities that go along with signing the forms. Can the Experts provide some clarification? Thanks!

Kimberly Boberg, Taylor Costanzo, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

Indeed, we can, and you were wise to check as to what the responsibilities associated with signing the 5500 are. First of all, there are actually two signature lines on the form: one for the plan administrator and second for the employer/plan sponsor. As indicated in our Ask the Experts column on the subject; the plan administrator can be the employer or a third party; you will need to check the plan document to determine who has been designated the plan administrator. If it is a third party, you should NOT sign the 5500 as plan administrator; a representative of the third party should sign instead. If it is the employer/plan sponsor, and you are an authorized representative of the employer, you should indeed sign as plan administrator, recognizing that you may be then responsible for various administrative functions of the plan as stated in our column.

The second signature line, which is for the employer/plan sponsor, is more straightforward to complete. If you are an authorized representative of the employer, you may sign here; if you are not, you may not. If you do sign as an authorized representative of the employer, note that the plan document likely assigns many responsibilities to the employer, so you should be prepared to carry out these responsibilities. Most importantly, the employer is often designated as a fiduciary under the plan, which includes a myriad of responsibilities that go well beyond filling the 5500 form and apply to retirement plans both large and small.

We note that the Form 5500 is filed under penalty of perjury, which means that anyone signing should, at a minimum, review the form at a high level to be sure that nothing in the form is obviously inaccurate.  If you have any questions regarding retirement plan responsibilities, be sure to contact outside ERISA counsel with specific expertise in this area.

NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice. 

Do YOU have a question for the Experts? If so, we would love to hear from you! Simply forward your question to Amy.Resnick@issgovernance.com with Subject: Ask the Experts, and the Experts will do their best to answer your question in a future column.