DOL Form 5500 Modernization Proposal Faces an Uncertain Future

DOL Form 5500 modernization proposal faces an uncertain future and many businesses don’t know how to react.

Deal with the Labor Division’s effort to expand, streamline as well as update the DOL Form 5500 Collection has actually been halted till a new head of the DOL’s Employee Advantage Protection Administration (EBSA) remains in place, according to ERISA lawyer S. Derrin Watson.

Work with the Labor Division’s effort to increase, improve and also update the Type 5500 Collection has actually been stopped up until a brand-new head of the DOL’s Staff member Perk Safety and security Administration (EBSA) remains in place, inning accordance with ERISA attorney S. Derrin Watson.

Leading a workshop session at the 2017 ASPPA Yearly Meeting Oct. 23, Watson noted that Preston Rutledge, senior tax obligation as well as benefits advise on the Republican tax staff of the Us senate Money Committee, has been nominated to serve as head of the EBSA. Even thinking that Rutledge’s election is approved and he fills up the leadership vacuum at EBSA, “it is not most likely the [DOL form 5500 innovation] effort will certainly be high on his listing of priorities,” said Watson, keeping in mind that the fiduciary regulation will likely be his key emphasis.

As well as of course, the Trump administration’s restrictive view of the duty of the federal government generally, and also of federal guideline particularly, is basically the polar opposite of the view of the Obama administration, under which the Kind 5500 modernization effort was developed and also promoted. “There are a number of things I believe the new political leadership will wish to take in a different direction,” Watson informed guests.

ARA General Counsel Craig Hoffman, who regulated the session, kept in mind one element that might apply pressure on the EBSA to shuffle the Kind 5500 initiative higher on its checklist of priorities: the impending have to renew the vendor contract for administration of the EFAST digital filing system. Hoffman additionally suggested that also if the innovation proposition is withdrawn or reconsidered after brand-new leadership remains in area at EBSA, “some pieces of it might be burst out as well as relocated independently,” consisting of numerous arrangements that ASPPA supports.

Generally, the considerable expansion of the extent of the information gathered on the DOL Form 5500 Series proposed by the EBSA would certainly develop substantial new problems on those that prepare the kinds, and also the focus on higher public access would be a boon to plaintiffs’ lawyers. But Watson did highlight some excellent information, or even a possible company growth chance.

The Bright Side

Watson noted a significant enhancement in the means tiny DC plans are differentiated from large ones: Under the proposal, the interpretation would be based on the variety of active individuals with account balances.

Additionally, 5500-EZs and Kind 5558 expansion demands can be filed electronically (paper declaring would still be offered). The latter might be a long-sought service to the problem come across by filers that submitted a 5558 but found that the kind had actually not been processed by the DOL by the end of the expansion, causing a “late” declaring that had not been really late.

To fit a brand-new reporting demand for health insurance plan developed by the Affordable Care Act (ACA), the EBSA’s Type 5500 innovation proposition consists of a required that all health plans must report ACA-mandated information on a brand-new Set up J. Keeping in mind that the DOL estimates that this new reporting demand will include over 2 million new DOL Form 5500, Watson asked: “Do you see an opportunity to increase your business?”


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Does Your Business Need DOL Form 5500 Preparation? We love to help!

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Form 5500 Schedule C Filings

Form 5500 Schedule C Filing Requirements

What is Form 5500 Form?

Form 5500 is the form used to file the Annual Report of Employee Benefit Plan information with the DOL (Department of Labor). If the Employee Benefit Plan is subject to ERISA (the Employee Benefit Income Security Act of 1974), form 5500 must be filed annually. ERISA requires that companies file information on their qualified welfare and pension plans with the IRS every year.

Who Needs to File Form 5500?

The sponsor of the Employee Benefit Plan or arrangement that is subject to ERISA must file Form 5500. Plans that are subject to ERISA include, but are not limited to:

– Profit sharing plans
– 401(k) plans
– Stock bonus plans
– Money purchase plans
– Certain annuity arrangements
– Church pension plans elected to be covered by ERISA
– Individual retirement plans established by employers
– Certain welfare benefit plans providing medical and dental benefits, severance pay, and life insurance.

form 5500 schedule c

How to File Form 5500

The 5500 form is due on the last day of the month following the 7th calendar month from the end of the plan year. This means July 31 for the calendar year plans, assuming it is a business day. The due date can be extended by 2 – 2 ½ months by submitting Form 5558 on or before the original due date of Form 5500. A Corporate Tax Extension Form 7004 can also be used to extend the filing of Form 5500 by 1 – 1 ½ months if the corporate fiscal year and the plan year are the same.

The form must reflect the characteristics of the plan and its operations and consists of the main form together with required schedules and attachments. Specific schedules required will depend on the type of filer and is generally broken down into 2 categories: Pension benefits; and Welfare Benefits – further subdivided into large or small plans.

What is Form 5500 Schedule C?

For large plans Form 5500 Schedule C must be filed which outlines service providers utilized by the plan to whom more than $5,000 were paid in fees; or an enrolled actuary or accountant whose services were terminated in the plan year. In general, large plans with participants of 100 or more have more complex reporting requirements than One-participant plans. Usually, these plans are required to include audited financial statements and to file Schedule C. Schedule C Form 5500 requires expanded reporting on fees for services rendered by providers that became effective from the beginning of January 1, 2009.

Form 5500 Schedule C Consulting

If you need help preparing your Form 5500, our company has been assisting plan sponsors and employee benefits brokers in eliminating the worry and burden associated with the Form 5500 filing process. Our dedicated customer service and proven processes have made us one of the most trusted ERISA Health and Welfare reporting companies in the business. The Plan Sponsor is ultimately responsible for the complete and accurate filings of Form 5500, and our expert consultants can assist your business in ensuring that your filings are prepared in accordance with ERISA reporting standards without the worry of comebacks from the Department of Labor.

We provide many Plan Sponsor needs including the following:

– Managing timing and deadlines
– Gathering Schedule C data from administrators and insurance companies
– Help ensure compliance
– Manage ERISA requirements and changes over time
– Provide e-filing instructions and guidelines
– Discuss and review preparation and completion of schedule C
– Prepare signature-ready Form 5500 Schedule C for E-Filing
– Prepare Form 5558 Extension of Time to File if necessary
– Prepare Summary Annual Reports
– Keep up to date with changes in the Federal Rules and Regulations that impact Form 5500 submissions.
– Present recent updates from the IRS and DOL
– Help avoid penalties


Give us a call today at (515)-244-2424 to discuss the best solutions to your Form 5500 Schedule C filing issues. Our expert team of consultants will provide you with complete peace of mind that your Form 5500 filings are compliant and up to date.

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Are Your Qualified and Nonqualified Employee Benefit Plans in Compliance With the New ERISA Disability Claims Regulations?

Effective for cases filed after April 1, 2018, employee benefit strategies controlled by the Worker Retirement Earnings Safety Act (ERISA) have to follow the US Division of Labor’s brand-new disability insurance claims laws.

What do the new regulations call for?

The purpose of the new guidelines is to guarantee full and also fair insurance claims assess procedures for any type of decision whether a complaintant is “disabled” in regards to an ERISA plan.

In many aspects, these expanded requirements mirror the protections that were added by the Patient Defense and Affordable Care Act (ACA) for certain group health insurance plan claims, such as requirements to avoid disputes of passion, as well as to make sure that rejection notifications are delivered in a “culturally and also linguistically proper way.” The policies additionally take on the ACA requirement to notify plaintiffs if the strategy is based on a decision on any kind of proof or reasoning taken into consideration, trusted, or created by the claims manager (or at its instructions) during the pendency of the appeal, and to offer the plaintiff with enough time to respond before a damaging benefit resolution is made (although they do not embrace the ACA guideline automatically providing the strategy more time to render a decision in such instances).

In many areas, the demands for special needs insurance claims are much more onerous compared to the ACA group health plan demands. Rejection letters for disability claims need to consist of the following aspects that are not required for other ERISA plans:

  • a conversation of the decision, including a description of the basis for disagreeing with or not following: (1) the views provided by the complaintant of health care as well as vocational professionals that treated or assessed the claimant; (2) the views of medical or vocational experts whose guidance was aquired in support of the strategy in connection with a claimant’s adverse advantage determination; and (3) a special needs determination concerning the plaintiff made by the Social Safety And Security Management; as well as
  • either: (1) the certain internal policies, standards, procedures, requirements or other comparable standards of the strategy trusted in making the adverse advantage determination; or (2) a statement that such policies, standards, etc. do not exist. (Team health plans, in contrast, might instead specify that a rule, guideline, method or similar standard was trusted without defining its identification, and also supply a copy at no cost upon demand).

With respect to initial insurance claim denials, the notice should also consist of a declaration that the claimant is entitled to obtain, upon request and at no cost, reasonable access to and also copies of all papers, documents and also various other information appropriate to the claim.

Relative to appeal denials, the notice should include a description of any kind of plan-specific restrictions duration that relates to the plaintiff’s right to bring a civil action, consisting of the schedule date on which the legal constraints duration runs out for the claim.

Which fringe benefit strategies need to be updated for the brand-new disability cases policies?

All ERISA employee benefit plans that have issue upon a determination that a claimant is handicapped go through the brand-new regulations. Plan enrollers ought to be conscious that special needs resolutions may be part of any kind of type of ERISA fringe benefit plan, not just those giving long-term or short-term special needs benefits. Group health and wellness strategies often prolong insurance coverage beyond age 26 for grown-up kids that are handicapped, as well as life insurance policy plans that frequently offer a costs waiver for participants who are entirely disabled. Some certified as well as non-qualified retirement or delayed compensation strategies include special provisions for handicapped participants, such as accelerated vesting or early retirement choices.

Not all plans have an advantage on a complaintant’s disability, nonetheless, have to be changed in order to conform. For instance, where a plan does not provide for its own fiduciaries to make a resolution of handicap, however rather accepts the determination made by the manager of one more plan (like the company’s long-standing handicap plan) then only the terms of the various other plan should be changed. Examples include health insurance that expand eligibility, or postponed settlement strategies that give increased vesting, to claimants that are receiving benefits under the company’s long-term impairment plan or Social Security Impairment Insurance (SSDI).

Also if a strategy gives for its very own fiduciaries to make a resolution of disability, it may not need to be separately modified if the plan’s terms incorporate by referral the handicap insurance claims and also allures procedures of an additional plan that has been amended. In such situation, the strategy’s fiduciaries should adhere to the brand-new procedures, and to update the cases and appeals rejection notices to adhere to the brand-new guidelines.

In short, it is only those ERISA pre-preparations that condition an advantage upon a resolution that a complaintant is handicapped, where the strategy fiduciaries themselves have the discretionary authority to identify if an individual is impaired, and where the strategy includes its very own procedures for making such determinations, that need to be modified. Plans with this layout attribute and will likewise need to issue a Summary of Product Modifications (SMM) to inform participants of the changes, as well as modify their claims as well as allures notifications.

ERISA strategies that are not likely needed to earn modifications to comply with the brand-new regulations consist of:

  • those that do not condition any benefit upon a determination that a claimant is disabled
  • those that accept an impairment decision from an additional strategy or celebration, such as the employer’s long-term handicap strategy or the Social Safety And Security Management
  • those that incorporate by referral the cases as well as appeals procedures of an additional plan that has been updated

If a plan is affected by the new case regulations, what actions should intend enrollers take and by when?

  1. Identify which strategies are affected. The very first step is to take an inventory of your ERISA benefit strategies and also figure out whether the strategy: (1) conditions an advantage upon a resolution that a plaintiff is impaired; (2) provides that the plan fiduciaries themselves have discretionary authority to identify if a participant is disabled, or accepts the decision made by one more plan; (3) has its own procedures for making such decisions.
  2. Changes should be executed by the end of the strategy year, as well as SMMs describing the changes must to be distributed to individuals no later than 210 days after the end of the plan year. Strategies where the fiduciaries themselves make a decision of special needs could want to consider amending the strategy to approve the resolution of handicap by another plan (such as a long-term impairment plan) or the Social Safety Administration.
  3. Where the strategy fiduciaries themselves have discretionary authority to figure out if an individual is handicapped, they will require to make such resolutions in conformity with the brand-new treatments for all types of cases filed after April 1, and also need to guarantee that insurance claims allures denial notifications that have been updated to comply. Also where the strategy has actually passed on optional authority to an insurer or Third-Party Administrator (TPA) to make such resolutions and also problem denial letters, the insurance company or TPA could need to personalize their conventional notification templates to accommodate distinct stipulations of the company’s strategy.

ACA Compliance: Employers Must Continue Until Change To Law Is Certain

A majority of employers have struggled to comply with the Affordable Care Act (ACA) that was passed in 2010. This is mainly due to the fact that ACA’s regulations and guidelines established a broad framework that where many aspects of compliance were different from the original plan of legislators. A lot of information on the act became clearer much later after the law was planned. Fast forward a few years later and we have a new administration with its own unique agenda and policies. Many employers are now unsure about the future of ACA compliance.

The election of President Donald Trump in last year’s election is the origin of the debate on ACA compliance. The President is said to have issued a series of executive orders earlier on in the year where he instructed various regulatory bodies such as the IRS to be more lenient to employers in regards to ACA compliance. However, the instructions of these orders were immediately put aside by the IRS claiming no formal law had been passed to remove ACA compliance.

Employers mainly find it difficult to comply with the act due to the numerous changes that occur to its regulations. Keeping up with these changes is necessary in order to maintain compliance. The future of ACA regulations is therefore very much uncertain until solid updates can be provided by the various regulatory bodies on the issue. Much of the act however remains the same so there are some fundamental regulations that employers can be certain of following. Some of the fundamental ACA compliance areas include:

– Avoiding market reform penalties under Section 4980D

– Avoiding employer mandate penalties under Section 4980H

– Reporting on Forms 1094 and 1095


Reporting

To add onto this, employers are still required to keep track of their data for annual ACA reporting. The IRS has a big role to play in terms of assisting employers with ACA compliance. Many employers cite difficulties with compliance due to problems with the systems provided by the IRS. The IRS has attempted to solve these problems by asking for periodic audits of its systems. The most recent audit highlighted key problems with its systems such as Tax Identification Number matching errors, missing portions of line 14 data and many more. These problems are being actively addressed to ensure that employers face no problem with complying with the Affordable Care Act.

IRS Penalty Notices

Another issue raised in regards to compliance is on the complexity of forms 1094 and 1095. Because of how the forms have been formulated recent years, the IRS has found it quite difficult to process them in time. This results in the IRS pushing its compliance deadlines every now and then. Notices on compliance penalties are also affected by this delayed process. In the end, the complexity of these forms contributes to the difficulty in ACA compliance. As a consolation, this is an issue that needs to be addressed by the tax body and not employers so all we can do is wait for something to be done.

Compliance Rules

ACA compliance is still a relatively difficult area for many employers across the U.S. Keeping up with the frequent changes and updates as well as strictly adhering to ACA rules and regulations can sometimes seem impossible. However, failure to comply with the Affordable Care Act leads to employers being penalized in the long run which is not a good thing. Attempting any processes or transactions that are forbidden by this law can result in huge annual penalties which can sometimes go up to thousands of dollars. Employers must therefore continue with ACA compliance until advised otherwise.


ERISA compliance is the law and Benefits Compliance Consultants, Inc. is an ERISA expert.  You simply can’t know everything there is to know about ERISA services.  And, if you’re hesitant to work with a benefits consultant because of the cost, you need to realize that our benefits consultants group can actually save you money, resources and time.  The only way to keep up with all of the changes is with the assistance of a professional company like ours.  Let our highly skilled professionals help make certain that your Plan is in compliance with the law.

Contact us at (515)244-2424 or CONTACT for your benefit plan compliance review today.

What Our ERISA Compliance Business Will Do For Your Company

Bc2 specialize in ERISA compliance and Form 5500 preparation.

Many accounting and law firms claim to be able to support your company in its efforts to be compliant. And, then the surprise letter arrives in the mail citing non-compliance and assessing thousands of dollars in fines for every employee affected by such transgressions.

Our ERISA compliance business will save you from extremely costly business-breaking surprises. We not only build a relationship with your company, but we provide a sturdy knowledge base that demonstrates expertise in all things ERISA compliance.

We even have proven client experience to show that we put you in the position to truly be compliant. This is one time to be ahead of the eight ball. No one wants to raise eyebrows at the Federal level. It is just another hassle and would cost a lot in pulling paperwork out of storage, off of old drives, while detracting resources from your business’s bread and butter: daily operations.

It is best to have a process in place that ensures all paperwork to be in compliance is completed and stored for easy access by HR. Our ERISA compliance business will set up such a process with you to ensure that it works within the scope of how your business already functions.

Congratulations if you own a business that is successful enough to hire on employees. Now, get ready to invest in them, according to the Federal laws and regulations, and local state laws as well. The Federal government’s ERISA is the topic here.

What Is ERISA?
The Employee Retirement Income Security Act of 1974 is also known as ERISA. It is actually a Federal law that on what types of information needs to be collected and filed away for employees who are going to receive benefits. It sets the bar for the minimum voluntarily pension, for instance, as well as for health plans for use within the private sector. In essence, ERISA provides protection for the individual employees who are parked in such plans.

Why Is ERISA Important?
While it is important to follow Federal laws to avoid costly fines, there are more compelling reasons to follow ERISA. For one, it is out of respect for the very people who contribute to your company, committing their time and lives to your success, essentially.

What Our ERISA Compliance Business Will Do For You
ERISA puts the obligation for administrative management of employee benefit plan paperwork on the employer who is providing such benefits. It includes plans such as retirement, health insurance, welfare and other benefits management. In other words, yes, ERISA makes requirements on employers about the way the benefits are managed.

As a compliance service provider, we ensure your company’s HR understand the legal requirements. This allows the HR team to adhere to ERISA properly. In addition, we recommend having HR management oversight to ensure that ERISA requirements are met.

What Does ERISA Cover?
As it turns out ERISA encompasses many different programs or welfare plans. In this case welfare plans refer to any funds, plans, or programs that give employees’s access to disability, death, and accident benefits, along with surgical, medical, surgical, and hospital access.

What many people forget is that unemployment insurance benefits are actually provided through contributions made by employers and administered through accurate payroll assignments by the employer on behalf of its individual employees. ERISA is very much connected to unemployment through new hire forms and taxation of the employer.

Other surprising areas touch by ERISA even include scholarships, days off, training plans, legal services, daycare, severance, and of course retirement programs.

ERISA Components
Reporting by administrators to the DOL and IRS simply means describing in summary how the employer’s coverage works.

ERISA Forms And Disclosure
Filing forms is a big part of the deal with ERISA. It requires annual reporting to the IRS on Form 5500/5500-SF. DOL welfare plan forms are required if there are more than 100 participants with full benefits. Other forms required by the IRS for retirement plans are not required to be filed at the same time as welfare plan forms.

Companies are under a lot of pressure to focus on their bottom line and in growing revenue. Turn to professionals like us to ensure ERISA compliance.


 

What To Expect When Using DOL Audit Preparation Services

Did You Know That Our Company Can Help With DOL Audit?

The U.S. Department of Labor conducts audits in an effort to help organizations adjust their policies and priorities. The purpose of audits is to find problems and areas that could be improved upon to reduce the risks of bad management, frauds and other problems. Going through a DOL audit can be stressful and you might be wondering how the audit will take place. Thankfully, there are DOL audit preparation services that can help you get ready for this process and give you a better idea of what to expect.

How Does The DOL Conduct Audits?

Businesses and organizations are selected in function of different criteria. Some businesses are audited because of past problems while others are selected because of the industry they are in. Audits are sometimes required by the DOL because there is a suspicion of fraud or because of the results of past reports and audits. In a lot of cases, businesses receive a notice with some details regarding the process. However, some audits are conducted without any warnings.

Why Should You Consider Using DOL Audit Preparation Services?

An audit preparation service can help you get ready for this process. The DOL usually shares information regarding what they will be looking at during the audit and what the objectives of the audit is. The professionals who work for preparation services are familiar with this process and will help you make sure that all the necessary documents are made available to the inspectors from the DOL. They will also help you understand what the objectives of the audit are and make recommendations if the DOL did not give you more details regarding the auditing process.

What Should You Do After Receiving An Audit Notice?

In most cases, the DOL gives businesses very little time to prepare. This is why you should contact a preparation service right away. You will get to ask questions about the audit and depending on your situation, the audit preparation experts you work with might recommend that you contact the DOL to ask for a time extension so you can prepare the records that will be necessary during the audit. This will give you more time to prepare and to ask more questions about the audit.

compliance consulting

What Should You Ask When Talking To The Auditors?

Most DOL audits have a fairly narrow focus. The DOL inspectors will probably want to see your records for a specific time frame or talk to specific employees. The audit might be about industry-specific compliances, safety regulations or about payroll. If you have been audited before or if you have encountered issues with something like overtime compensation or minimum wage compliance in the past, the auditors will probably focus on this same area.

What If You Have Made Mistakes In The Past?

Keep in mind that DOL audits are not about looking at past mistakes. If there have been some issues in the past, you need to show that you have addressed them and that your organization is now entirely compliant. If some issues are found during the audit, the DOL will issue some recommendations and will probably check again in the near future to make sure that you have made the necessary changes. The DOL auditors will definitely want to review your records and make sure that you are not repeating the same mistakes but past errors won’t be an issue as long as you made some changes.

What If There Are Some Current Compliance Issues?

It is best to reach out to a DOL audit preparation service like us if you know the auditors will find compliance issues while going over your records. The audit preparation specialists you work with will advise you on how to deal with the auditors and on how to show them that you are addressing these compliance issues. It is best to cooperate with the DOL auditors and to be upfront about any compliance issues that they might find. The audit preparation specialists you work with will also give you an idea of what the outcome of the audit is likely to be and advise on how to reach a settlement with the DOL. If there is a serious issue with compliance, they will probably recommend that you seek legal counsel after the audit.

How Can Specialist Help You Prepare For The Audit?

The experts who work for Benefits Compliance Consultants or BC2 know how these audits are conducted and will be able to review your records to make sure they are complete. They might notice mistakes with the FLSA classifications you use or might recommend that you update job descriptions. They might notice some inconsistencies in your records or that some policies are not always applied.

Working with an audit preparation service will make the auditing process a lot less stressful. These professionals can conduct their own audit and make recommendations that will help you comply with the DOL.

Contact us today if you need help with DOL Audit!

Call Us: (515)-244-2424

Our Compliance Consulting Firm Can Help You Get Your Business Organized

There are quite a few reasons why business owners of all types reach out to consultants like www.bc2co.com. Many aspects of running a business require additional outsourced help without necessarily adding people to the payroll. It certainly is beneficial when you have consultants on your side to act quickly, help you problem solve, figure out solutions and find avenues for growth. Compliance is also key, and our compliance consulting firm is ready to serve you.

What is compliance all about? Well, if you are reading this post you probably have some idea but let’s pretend you don’t because there are many compliance issues that can arise, but let’s first talk about taxes. How do you feel about your taxes? Business owners can feel great about keeping the books and day to day operations, but when it comes to tax time, each new year can be a major headache. Not to mention, it’s not just the end of the fiscal year when business owners have to concern themselves with taxes. After all, you are making quarterly tax payments, filing receipts and keeping up with taxes throughout the year, aren’t you?

Do you need any documents prepared? Maybe you have been finding yourself with ongoing tax questions, and our compliance consulting firm could make things easier on you. It would be easier on everyone if taxes weren’t so difficult, right? There are people talking about wanting to change the tax laws, but we will see. Until then, we are here to serve you anytime you need consulting on any matters related to compliance issues.

What do you know about ERISA compliance? This has everything to do with employee benefits. We can even help you provide the best solutions of course. We will evaluate your business based on compliance laws and regulations and will help you determine how you need to move forward. Of course we aren’t in the business of compliance to out you as the business owner through the ringer. We want to help you succeed, and we are here to show you our undivided attention and dedication to finding the best and most affordable solutions for your business.

It matters who the compliance firms are networked with when it comes to helping you get things done. With the right connections, and we do have them, we can help you with all kinds of situations. What is your biggest concern right now? Where would you like us to get started? The introduction to our services began with tax compliance because that is an area where many business owners feel they need help.

Properly orientating, training and providing benefits to employees is also key as mentioned. Is your facility meeting safety standards? You don’t have to be told that this is huge. If there is anything wrong, it needs to be fixed. Safety standards must be revisited all the time to be sure your business is handling everything appropriately. What other kinds of compliance issues can arise? Why else would you need the services of our compliance consulting firm?

You can be sure that you are even going to find out more about what we can do for you when you call us. We will handle all of your questions. If there is something we can’t do, we can tell you why and still help you try and figure out what to do. We want to see you succeed as a business owner and not have to worry about compliance issues anymore. You can continuously consult with us as you see fit or check in with us again when you need our services in the future.

Understanding compliance can even be a little difficult if you are new to the game. That is even more of a reason to reach out to us so that we can go over all the concerns you have. Maybe a recent event has you questioning whether or not you need consultants to run a compliance check on your business. Don’t leave anything undone, and let us tell you if there are changes that need to be made. Perhaps you are told changes are necessary, but you don’t know what to do next. We can help you figure that out, too. For everything concerning compliance, we can assess what is going on and what is needed.

We are here to serve and help your business succeed with benefits compliance needs.

Request a quote here: GET QUOTE

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Form 5500: Its Changes and Implications

Filing the Form 5500 is a regulatory requirement imposed by the government among benefit plan sponsors, who are mandated to do so.

It is through this form that the government monitors benefit plans and pension operations and investments, since it is in their interest to protect the welfare of the American people.

As a concerted effort among Pension Benefit Guaranty Corporation (PBGC), the Department of Treasury’s IRS, and the Department of Labor (DOL), the rule on filing the Form 5500 had been enforced. Since then, companies with welfare plan and 401(k) retirement plan must comply with this annually.

But the current form does not seem to be informative enough. This year, a proposal has been made to improve the Form 5500 reporting. This is to assist in the update of the current plan st

Since the announcement of the proposed changes, the government opened its communication lines and accepted comments from plan sponsors. Information on Form 5500 revisions is already being disseminated by government agencies for a successful implementation of the new form in 2019.

What are the changes to expect?

The proposal is bound to make valuable changes in the governance of benefit plans, as well as in the lives of individuals and employers. It is expected to benefit compliance with certain laws, provide a more comprehensive financial report, and cover a broader span of companies mandated to comply with Form 5500 reporting.

One of the salient features of the proposal is the addition of Schedule J. This requires employers to provide more detailed information on their benefit health plan packages and ensure compliance with the laws focused on protecting the rights and access of individuals to healthcare and welfare benefits. Those laws are the Employee Retirement Income Security Act (ERISA), Affordable Care Act, and Michelle’s Law, among others.

Another key feature of the new form is the addition of companies with welfare plans, which cover less than 100 employees, required to comply with the reporting. This aims for a wider coverage and greater transparency in the framework of group benefit plans among all plan sponsors.

What do the changes imply?

This is most advantageous for the companies that sponsor the benefit plans and the government. Their access to a large database of consumer information will help them improve the policies and plans that only aim to protect its beneficiaries.

Another advantage is for the individuals whose rights and interests are the highlight of the proposed changes. There will be extensive inquiries on the companies’ compliance with state rules on healthcare and retirement. Therefore, employers will be encouraged to offer benefit plans that are both compliant and competitive.

The disadvantages, on the other hand, are overwhelming. First, the cost of filing the Form 5500 is expected to increase approximately 5,500% more (in aggregate). This is because those companies that were previously exempted from filing will bring the numbers expected to comply from only a few thousands to 2 million.

Second, the processing, although electronic, will take more time. There will be more details required from plan sponsors such as questions on their full compliance with certain state laws and disclosure requirements.

The most apparent implication is that the change presents the government’s continued commitment to support the welfare and healthcare of its people. This is promising for most Americans that will need greater welfare benefits, health protection, and better healthcare services in the future.

The higher standards of compliance that will be enforced on more companies raise the standards of providing benefit plans in the U.S. as well. Although the reporting might pose some inefficiencies or inconveniences from the employers’ end, the consequence of non compliance is more costly. Failure to file Form 5500 on time is a fine of $2,063 daily. All these are great incentives that benefit compliance.

The healthcare reform that gave birth into improving the form 5500 aims only to reinforce the rights and give importance to health and welfare of individuals. While the changes are still in its early stages, it’s worth it to know about what the changes are and what they imply. Before the change reach its full shape, individuals and employers alike should take an active role in forming the reporting standards that will ultimately change America’s health care system.

benefit consultants groupGo ahead and request a quote or simply call us at (515) 244-2424


Comparing Forms 10-K and 5500: How Do They Differ?

Comparing Forms 10-K and 5500: How Do They Differ?

The benefit plans provided by companies and firms are regulated by the government. The government does this by assigning some of its agencies to specifically monitor pension fund performance. For public pensions, two forms are studied by the government: form 10-K and form 5500. Let us compare these two data sources and find out what distinguishes one from the other.

US benefit consulting groupThe element that these two forms have in common is that both are required by the government to be submitted annually for the purpose of assessing the performance of a company when it comes to providing employee benefits and keeping the rights of their employees protected.

Form 10-K is a report made annually to the US Securities and Exchange Commission or SEC. This report must be filed 90 days after the fiscal year ends. The nature of the report will depend on how big the company is and how long the company has been public. This form details the financial situation of a company. It also includes information about the business’s current condition. The form includes financial statements that have gone through auditing by a third party accounting firm. This form is not similar to the report given to shareholders in the form of a booklet whenever they meet to choose new directors.

The US Securities and Exchange Commission requires that disclosure sections need to be included in the form 10-K. Usually, this form can include some, if not all, the following elements:

  • Financial data. A financial summary detailing data over the past five years must be included in the form. This provides an overview of the financial performance of the firm. Pension obligations is not necessarily included in this part.
  • Results of Operations and Analysis of Financial Condition. This section can include any of the following:
    • Accounting for pensions
    • Net pension liabilities
    • Pension plan cash contributions
    • Unfunded pension obligations

If you need more information regarding pension obligations, the footnotes contained in Form 10-K may provide the information you need. When it comes to welfare plans and pension, the following information may be available in the form:

  • Benefit obligations
  • Pension funding requirements
  • Pension plan asset return rates
  • Return of assets
  • Trends in health care cost

On the other hand, form 5500 is a report also made annually to the Department of Labor, the IRS, and the Pension Benefit Guaranty Corporation.

After all of the required information has been attached to the form, the total you will submit can amount to tens of pages’ worth of documents. The form 5500 includes the following:

  • Financial information
  • Insurance information
  • Participating plan information
  • Retirement plan information
  • Service provider information
  • Single employer defined benefit plan information

The filing of this form can easily be started by checking of the website of the Department of Labor.

The difference between these two is that Form 10-K provides projections for the future, whereas form 5500 only focuses on the present. Therefore, the information provided in 10-K is significantly bigger, from the reports on pension obligation to the number of requirements to be submitted.

Form 5500 provides more information since it includes present-dated information that is not really shown in form 10-K, such as the present liability amount.

If you are wondering how to reconcile the information in these two forms, the answer is you don’t. The information provided by these two forms naturally differ because they do not serve the same function, and they do not focus at the same time frame. The government requires firms to submit different forms that are designed to provide different points of view to those who are going to be checking them, so thinking that these two forms should be the same would be wrong.

It is important to understand what each of these two forms do and which agencies look at the information. These forms are checked in order to ensure quality in benefit planning and in upholding employee rights.


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Back To the Basics: Form 5500

Form 5500: The Basics

One of the most important government forms you need to complete to secure your retirement plan is form 5500. If you work for a company that offers either a retirement plan or a 401 (k) plan, you should be annually completing the form since the plan began to be implemented. Every year, the Pension Benefit Guaranty Corporation, the Department of labor, and the IRS check if your company is still able to protect you, and whether your plan continues to be compliant with the set regulations.

The form is always heavily scrutinized by many individuals and government offices, so knowing what it does, what it contains, and when to file it is of extreme importance.

What is Form 5500?

If you work for a firm that offers a tax qualified retirement plan such as the 401(k) or something similar, during the time you worked for that firm, you should have been filing form 5500 every year since your business started adopting the plan.

The form looks almost the same as other forms issued by the IRS; the only difference being this form is not just held by the IRS, but also by other government bodies such as the Pension Benefit Guaranty Corporation and the Department of labor. Each of these agencies have their own set goals when they look at your form, but ultimately, what they are trying to ensure is that your plan is being operated for your benefit and that it is being correctly processed every year.

  • The IRS uses the information on your form to determine your tax compliance. The IRS is the agency responsible for the regulations that allow tax benefits and retirement plans to be implemented to both workers and employers.
  • The Department of labor uses the information on your form to ensure that the plan your company is using is not breaking any rules. It is also used to make sure that the company keeps your rights protected and secure. The DOL monitors how the company operates the plan.
  • The Pension Benefit Guaranty Corporation monitors what is written on your form to determine whether the firm you work for is compliant in providing you with the benefits you ought to receive, regardless if the firm has moved on to using a new plan.

In summary, the 5500 form is used not only for law enforcement, but also for analysis. The government checks how many businesses offer retirement plans, whether workers are recipients of any type of benefit, how many large and small plans are available to people at a given time, and what new regulations may be enforced in order to improve the present situation.

What are “small” and “large” plans?

Plans that are assessed in your form are categorized as being either “large” or “small”.

If the plan had less than one hundred members on its first day of implementation, the plan is considered to be a “small” plan. Those that exceed that number are called “large” plans. It is those firms that have large plans that need to file the 5500 every year, while firms with small plans only have to complete a simpler form called the form 5500-SF.

A plan can continue to be considered small if the number of participants does not exceed 120 at the start of the new plan year. Every participant regardless of whether they are active or not are considered in the head count.

When should it be filed?

The form 5500 should be filed after the end of the plan year, on the last day of the seventh month. If you need more time, you need to file form 5558, which can extend the deadline for another two and a half months.

The form is never the same every year, and there are always changes introduced in order to ensure that it matches the needs of firms and workers today. Every year, the IRS imposes new changes to the form, and the IRS simply sends instructions to firms on what has been updated on the form.


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