The Department of Labor (DOL) recently reported that in reviewing Form 5500 data for 2018 a significant number of multiple employer plans (MEPs), including MEPs sponsored by professional employer organizations (PEOs), failed to include a complete and accurate list of participating employers with their Form 5500/5500-SF.
In fact, the DOL identified 101 of 185 MEP filings as non-compliant.
Non-compliance took the form of:
Filer replacing employer names with abbreviated names, initials, client numbers, or other labels;
The filing reporting only the last four digits of EINs;
The filing including an attachment with no information and a note “Details available upon request;” and
Filing incorrectly listed the PEO as the only participating employer.
None of these are compliant with filing requirements. Compliance failures can subject organizations to stiff penalties. That said, the DOL would rather encourage voluntary correction of these issues. To that end, on July 24th, the DOL issued Field Assistance Bulletin 2019-01 (the “FAB”). The FAB provides temporary relief related to this type of filing non-compliance.
The FAB grants the temporary relief for MEPs that failed to meet these specific filing obligations with their Form 5500 for the 2017 plan year and before. And the relief relates solely to civil penalties for Form 5500 filing obligations.
The temporary relief is provided to MEP administrators who properly comply with the requirement to provide a complete and accurate list of participating employers, their EINs, and a good faith estimate of each employer’s percentage of total contributions (including employer and participant contributions) made by all participating employers for the 2018 and following plan years.
Because the 2018 Form 5500 due date for calendar year plans was July 31, 2019 the DOL grants MEPs a special filing extension up to 2½ months to file their 2018 annual report. The FAB recommends that MEPs check the “special extension” box under Part I, Line D on the 2018 Form 5500/5500-SF and enter “FAB 2019-01” as the description to use this extension. A Form 5558 is not needed in this instance.
If a MEP has already filed for 2018, they’ll have to file an amended Form 5500/5500-SF that complies with these reporting obligations by October 15, 2019 for this relief to be available.
Post-temporary relief the DOL expects full compliance with these reporting obligations on a prospective basis.
If you’re unsure whether you have complied with these requirements please contact the service provider (recordkeeper or third party administrator) that created the 5500/5500-SF for your plan.