To meet ERISA reporting requirements, most 401(k) plans must file a Form 5500 annually. This form is designed to disclose certain plan-related information to the Federal government and plan participants. There are three versions of the Form 5500, each with different filing requirements. In general, the largest 401(k) plans have the most detailed – and costly – filing requirements.
While a 401(k) provider generally prepares the Form 5500, employers should still understand the filing requirements for their 401(k) plan – otherwise, substantial penalties and avoidable plan expenses are made more likely. This knowledge can also help employers monitor their 401(k) provider – an important fiduciary responsibility – to confirm they’re preparing the Form 5500 timely and competently.
What are an employer’s Form 5500 filing requirements?
The government’s Form 5500 series includes 3 versions. Generally, the Form 5500 version a 401(k) plan must file for a year is based on its participant count. A description of each version – and when it must be used – is below. For more information, see the DOL’s Reporting and Disclosure Guide for Employee Benefit Plans.
- Form 5500-EZ – Only “solo 401(k) plans” – which just cover a business owner and their spouse – can file this return.
- Solo 401(k) plans with less than $250,000 in plan assets as of the last day of the plan year don’t have to file a Form 5500-EZ (or any Form 5500 at all).
- Form 5500-SF – “Small 401(k) plans” – a plan that covers less than 100 participants on the first day of the plan year – can file a simplified version of the Form 5500 by meeting the following eligibility requirements:
- The plan satisfies DOL independent audit waiver requirements.
- The plan is 100% invested in “eligible plan assets” with readily determinable fair value (e.g., mutual funds, variable annuities).
- The plan holds no employer securities.
- Form 5500 – 401(k) plans that cover more than 100 participants (“Large 401(k) plans”) and small 401(k) plans that don’t meet the Form 5500-EZ or SF filing requirements must file a long-form Form 5500.
- Unlike the Form 5500 EZ and SF, the Form 5500 is not a single-form return – it must be filed with certain schedules and/or attachments. Below are the schedule requirements applicable to large and small 401(k) plans.
|Item||Large 401(k) Plan||Small 401(k) Plan|
|Schedule A||Must complete if plan has insurance contracts.||Must complete if plan has insurance contracts.|
|Schedule C||Must complete Part I if service provider was paid $5,000 or more, Part II if a service provider failed to provide information necessary for the completion of Part I, and Part III if an accountant or actuary was terminated.||Not required.|
|Schedule D||Must complete Part I if plan participated in a CCT, PSA, MTIA, or 103-12 IE.||Must complete Part I if plan participated in a CCT, PSA, MTIA, or 103-12 IE.4|
|Schedule G||Must complete if Schedule H, lines 4b, 4c, or 4d are “Yes.”||Not required.|
|Schedule H||Must complete.||Not required.|
|Schedule I||Not required.||Must complete.|
|Schedule R||Must complete.||Must complete.|
|Independent audit report||Must attach.||Not required unless|
Schedule I, line 4k, is