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QKA - 2 > Course 7 Form 5500 and Government Reporting > Flashcards

Course 7 Form 5500 and Government Reporting Flashcards

(53 cards)

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1
Q

5500 - EZ

A

single participant plans, not subject to Title I of ERISA, filed under IRS rules

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2
Q

5500 - SF

A

small plan

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3
Q

5500

A

Large plans

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4
Q

What plans don’t have to file a 5500 annually?

A

Governmental and public education employers, churches that do not elect to be covered by ERISA, IRAs based plans such as SEPs and SIMPLE IRAs, nonqualified plans, and 403b arrangements

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5
Q

What is the deadline for 5500’s?

A

7 months after the end of the plan year

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6
Q

Requirements of a one-participant plan

A
  • cannot be aggergated with another plan to satisfy 410b coverage
  • file 5500 - EZ if assets are greater than $250k at the beginning of the year
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7
Q

Small plan requirements

A
  • less than 100 participants as of the first day of the plan year
  • eligible for the same plan audit waiver on the basis of its percentage of qualifying assets
  • plan holds no employer securities at any time during the plan year
  • all assets have a determinable market value
  • not a multiemployer plan that are jointly sponsored by a union and more than one employer
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8
Q

Title I of ERISA

A

one of the most significant portions is the reporting and disclosure requirements. One of the requirements is to file an information return each year that contains plan info (form 5500).

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9
Q

80/120 transition rule

A

a plan can continue filing as either a large or small plan when the participant count fluctuates. If a small plan has less than 120 participants, but more than 99, they can continue to file as small. If the plan files as a large plan it cannot subsequently file as a small plan unless it drops below 100 people. It must file as small if it is below 80.

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10
Q

How many participants must a new plan have to file as a large plan?

A

99+

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11
Q

Schedule A

A

insurance info

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12
Q

Schedule C

A

service provider info for large plans only, discloses amounts paid from plan to service providers

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13
Q

Schedule D

A

direct filing entity/participating plan schedule, for large plans only that have investments with direct filing entity (DFE).

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14
Q

Direct filing entity (DFE)

A

investment structured like a mutual funds, but is not subject to the public disclosure rule.

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15
Q

Schedule G

A

financial schedules, only for large plans with defaulted loans

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16
Q

Schedule H

A

financial info, required for all large plans, BS, Income statements, accountants opinion and compliance

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17
Q

Schedule I

A

financial info for small plans

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18
Q

Schedule R

A

pension plan info, used for small and large plans

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19
Q

SAR

A

summary of the plan’s financial position distributed to plan participants.

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20
Q

When must the SAR be distributed to participants?

A

no later than 9 months after the close of the plan year, extended by 2.5 months when the form 5500 is extended.

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21
Q

8955-SSA

A

terminated participants who still have a balance in the plan, reports deferred vested benefits to the IRS and social security administration (SSA). Also used when a participant is fully paid out.

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22
Q

How to file 5500

Study These Flashcards
A

on the DOL’s EFAST2 system

23
Q

When does the DOL required to publicly display 5500 info?

Study These Flashcards
A

within 90 days after filing

24
Q

Which 5500’s are filed with the DOL?

Study These Flashcards
A

5500 and 5500-SF

25
Which forms are filed with IRS?
5500-EZ and 8955-SSA
26
What is the IRS penalty for a late filing?
$25 per day, max $15k
27
What is the DOL penalty for a late filing?
up to $2,194 per day with no max
28
What is the DOL penalty for 5500-EZ?
None, not subject to Title I of ERISA
29
Can the penalty for a late filing be reduced?
Yes, through the delinquent filer voluntary compliance program (DFVC)
30
What is the late filing penalty under DFVC?
$10 per day from the date the report was due (no extensions)
31
What is the max penalty in DFVC for a small plan filer?
$720
32
What is the max penalty in DFVC for a large plan filer?
$2,000
33
When a plan has failed to file correctly for multiple years, what is the per-plan max penalty?
small - $1,500, large - $4,000
34
What is the IRS penalty relief for filing a late form 5500-EZ?
$500 for each return up to maximum $1,500 per plan
35
How to qualify for IRS penalty relief
the plan sponsor or admin must file the late return on paper
36
Audits check if...
1. plan assets covered by the audit have been fairly valued 2. plan obligations are properly stated and described 3. contributions were timely received 4. benefit payments were made in accordance with plan terms 5. participant account's are accurate 6. there are not any operational issues that may impact qualification status 7. there are not any prohibited transactions
37
Audits and accountants
must be independent of the plan
38
two types of audits
Qualified and unqualified
39
Qualified audit
results of the audit are based on unaudited financial info because assets are with a financial institution like a bank or trust company. The auditor does not need to audit the financial data because they have their own regulations.
40
Unqualified audit
auditor reviews all the plans financial info
41
A small plan must satisfy the following to be exempt from an audit
1. Investment requirement 2. Enhanced disclosure
42
investment requirement for small plans
at least 95% of the plan assets must be invested in qualified plan assets or if the 95% is not satisfied, the assets that are not qualified bust be covered by a fidelity bond - based on assets at BOY
43
Qualified plan assets
1. qualifying employer securities 2. participant loans 3. assets held by a regulated financial institution 4. shares issued by an investment company registered under the investment company act of 1940 (mutual fund) 5. invesments and annuity contracts issued by an insurance company 6. assets in a participants account where the participant can direct the investment of the account and where the participant is provided at least annually a statement from a regulated financial institution describing the assets held.
44
enhanced disclosure for small plan
the SAR must include additional info pertaining to the financial institutions that hold plan assets and if applicable, the surety company that issues the bond necessary to comply with additional fidelity bond requirements
45
Nonqualifed plan assets
coins and collectibles, real estate, commodities, privately held companies, privately held debt instruments.
46
Fidelity Bond
- ERISA requires that every person who handles plan funds be covered by a Fidelity Bond that provides protection of the funds to the plan against loss by reason of acts of fraud or dishonesty - 10% of BOY assets - max $500k - can be purchased with plan assets
47
Three types of Fidelity Bonds
individual, schedule, blanket
48
Individual Fidelity Bond
covers a named individual
49
Schedule Fidelity Bond
covers number of named individuals or each of the occupants of positions listed in the schedule
50
Blanket Fidelity Bond
covers all the insured's officers and employees with no schedule, may include an agents rider, which covers acts by other persons to whom covered functions are delegated, such as admins or other service providers.
51
Terminating plans
must file a form 5500
52
When is the final return filed?
the plan year in which the final distribution of assets occurs
53
Short plan year
happens when the final distribution happens before the end of the plan year

QKA - 2 (9 decks)

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