Walston is with National Computer Systems (NCS), the vendor processing the forms.
Speaking at the 2000 ASPA Annual Conference, Walston recently outlined the top ten mistakes made by filers, according to Commerce Clearing House (CCH). He noted errors that primarily apply to hand-written filings, and specifically excluded large plans from his error considerations.
Other than not signing the form, the most common mistakes are:
- Not providing characteristic codes (lines 8a and 8b)
- Not providing funding or benefit type (lines 9a and 9b)
- Incorrectly completing schedule I, especially lines 2d and 2i, including forgetting to include a minus sign for a negative number
- Omitting business codes or using invalid codes, (such as using the old four-digit code instead of the new six-digit code)
- Using conflicting or incorrect participant data
- Submitting blank or partially completed schedule B, or submitting the schedule unnecessarily
- Filing an incomplete schedule R, such as omitting the minimum contribution information in line 6
- Failing to complete Part 1 of the Form 5500, such as omitting data on the plan period
- Using the incorrect plan number, such as designating the plan as a pension plan when it is a welfare plan.
If a mistake is made, the Department of Labor (DOL) will send out a letter to the filer and include the form that needs to be completed. The filer then has 30 days to answer the letter and correct the mistake.
Because of the new processing system, the filer will now be required to actually complete the form included in the DOL letter and send it back, rather than including the missing information in a letter to the DOL – the prior procedure.
Filers are also slowing the processing of Form 5500 unnecessarily. Common factors include:
- using staples on the documents
- entering data in the memo line (the dotted line)
- sending photocopies of forms with “COPY” stamped on them
- sending in blank forms
- writing too lightly in pencil
- using felt-tip pens
- sending in unrelated items, such as credit card bills and payments
- putting names and addresses in the wrong fields
- writing illegibly
- putting blank spaces between letters, which causes the system to read the word incorrectly
- not using standard forms.
Walston notes that while the DOL is allowing non-standard forms to be used, their use does slow the process down.