DOL pointers can help prevent penalties
The SECURE Act substantially increases the penalties for the failure to file a Form 5500 and/or Form 8955-SSA for forms required to be filed after December 31, 2019.
The Department of Labor (DOL) has compiled practical tips for some of the most frequently occurring Form 5500 and Form 5500-SF filing problems.
These tips are designed to help filers avoid getting EFAST2 specific error messages applicable to a transmitted filing, and thus can be helpful in avoiding these increased penalties. Note: even if a third party such as the recordkeeper prepares the filings, it is the plan sponsor’s responsibility to ensure accuracy before signing them.
What you should know
- Failing to sign the form is the number one reason that filers receive a "Processing-Stopped" error message when submitting the Form 5500 and Form 5500-SF.
- The Form 5500 and Form 5500-SF must have the proper Employer Identification Number (EIN) and plan number. Switching EINs without reporting the change could result in correspondence from the DOL or the IRS.
- The time period entered in Part I of the Form 5500 and Form 5500-SF cannot be greater than twelve months.
- Preparers must make sure that the valid business code entered best describes the nature of the plan sponsor's business.
- Preparers are required to indicate all the applicable Funding and Benefit Arrangements and ensure that they are filing all the required schedules and attachments.
- Preparers are obligated to “validate,” or perform a check of errors, before the filing is submitted to the government.