Electronic Form 5500 filing

7558 King’s Pointe Road

Toledo, OH 43617

419-842-0600

Fax 419-841-4736

IMPORTANT INFORMATION REGARDING ELECTRONIC FILING OF IRS FORM 5500

Beginning with the 2009 plan year, the Department of Labor (DOL) will require retirement and welfare plans to file their annual reports (Form 5500) electronically. As Plan Sponsor, you will not actually file for the 2009 plan year until 2010. Concurrent with the new electronic filing requirements, the DOL and IRS will make modifications to some of the Form 5500 schedules, eliminate other schedules and introduce a new short form 5500 for certain small filers. Under the new electronic filing requirements, there are 3 alternatives available: (1) A web-based system used by a preparer to complete and transmit Form 5500 to the DOL; (2) A third-party software program used by a preparer to complete Form 5500 which is then transmitted to the DOL via the internet; and (3) the DOL’s web-based system (IFILE).

Pension Innovations & Consulting, LLC. (PIC) will use the streamlined alternative (1) to prepare and assist you in electronically transmitting your 5500 to the DOL.

When is the new electronic filing program effective?

The new electronic filing program (EFAST2) is effective for plan years beginning on or after January 1, 2009. Plans will be able to commence filing electronically on January 1, 2010. Any plan which has a Form 5500 due before January 1, 2010 (short 2009 plan year) will have an automatic extension until 90 days following the date on which the Form 5500 is available for filing electronically. That date would be March 31, 2010, unless the DOL changes the date on which electronic filing will be available.

Do all retirement plans have to file electronically?

Yes, with the exception of owner-only plans filing 5500-EZ. Owner-only plans which satisfy certain requirements will file a paper copy of Form 5500-EZ with the IRS. However, owner-only plans which satisfy the requirements to file Form 5500-SF may elect to file electronically.

As Plan Sponsor, what do I have to do to file electronically?

You will be required to obtain electronic signature credentials by going to the DOL website and entering certain personal information. The DOL then will send an e-mail confirming the registration and provide a link from which you will obtain a user ID and PIN code. You must have access to a computer and have an e-mail address to obtain your personal credentials. According to the DOL, you will be able to obtain your credentials on or after January 1, 2010. PIC will provide you with further updates and instructions regarding these procedures.

Can the plan TPA or other party obtain electronic signature credentials on behalf of the Plan Sponsor?

No. Every individual who signs a form or schedule must obtain his own credentials. Furthermore, the government limits one set of credentials per e-mail address. The filing signer will enter into a signature agreement under which the individual acknowledges that the electronic signature has the same legal force as a handwritten signature.

Since PIC is preparing the Form 5500, how does the filing signer enter the filing signer credentials without sharing the credentials?

PIC uses a web-based solution through which the signer can view the Form 5500 and enter his filing signer credentials. PIC will invite the filing signer to a signing ceremony. Once the signer electronically signs the Form 5500 (i.e. enters the PIN code and signer ID), the Form 5500 is transmitted to the DOL.

How do I file attachments electronically?

If a Form 5500 filer must include an attachment with its filing, PIC will scan the attachment into a PDF format. Once the attachments are in their proper format, they will be included with the forms transmitted to the DOL.

How do I file a plan audit electronically?

If the plan is subject to audit requirements, the DOL requires the auditor to complete the audit on his firm’s letterhead with the name and address of the firm. The audit must be signed by the accountant completing the audit. The accountant (or PIC if accountant is unable) then scans the audit into PDF format and PIC will attach the audit to the Form 5500 filing.

May a plan file its Form 5500 and schedules and later file its audit?

No. A plan subject to the audit requirement may not file Form 5500 without its audit. The DOL will not accept the filing without the audit.

How do I obtain an extension of time to file Form 5500?

The procedure for obtaining an extension of time to file Form 5500 has not changed. PIC will file Form 5558 with the IRS on your behalf. However, under EFAST2 the Form 5558 will not be attached to the electronic filing. The plan sponsor simply will retain a copy of the form in its plan file.

How do I know if my electronic filing was accepted?

You may log on to the DOL’s web site 24 hours after transmitting the filing to determine if it has been accepted. It is anticipated that PIC’s web-based solution will have the capability of being notified whether a particular filing has been accepted.

Will my Form 5500 and schedules be posted on the DOL’s web site?

Yes, the DOL will post the Form 5500 and schedules within 90 days of the filing.

What information will be available on the DOL’s web site?

The DOL will post Form 5500 plus all of the schedules and attachments. Since Schedule SSA will not be part of the filing starting with the 2009 plan year, the SSA will not be posted on the DOL web site

If my return is available on the DOL web site, do I still need to make it available to plan participants?

Yes. If the plan sponsor has an intranet site, the plan sponsor must make the Form 5500 and schedules available on its intranet site.

Will I still need to distribute a Summary Annual Report (SAR)?

Yes, and as in the past it will be included as part of PIC’s services.

As the time approaches, your PIC consultant will be there to guide you through the process.

November, 2009