Questions to Skip on Form 5500

Stacey Bradford, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, vice president, Retirement Plan Services, Cammack Retirement Group, answer:

Though it does indeed sound bizarre, your colleague is quite correct! In fact this is the second year in a row that there is a quirk in the Form 5500 filing that requires the filer to skip certain questions. The reason for this is that the Internal Revenue Service (IRS) added some questions that it later decided to essentially retract, but the questions still appear on the form. The list of questions that should be skipped is here, and you should confirm that such questions were skipped, since there is zero benefit to responding to such questions (and, indeed, it may be a detriment). Finally you should note that some of the skipped questions, though they relate to the same content as the 2015 filing are numbered slightly differently on the 2016 form, so be certain to examine your 5500 filing carefully to confirm that the proper questions were skipped.

In addition, here are some other last-minute 5500 filing tips from the Experts

Even if your form is “signature-ready,” this does NOT mean you should simply sign it without review—The Experts have encountered many example of errors on completed returns that were supposedly “signature-ready.” Thus, you should indeed conduct a line-by-line review of all of your 5500 filings to confirm that the information is complete and accurate, If you don’t understand an entry, contact your preparer for clarification. Particular attention should be paid to the following areas:

Participant counts;

• Plan numbers and employer tax ID numbers;
• Confirming that figures reconcile to the prior year filing, such as participant counts or plan asset figures;
• Reporting all applicable service provider information on Schedule C, particularly inactive providers who are not grandfathered from 5500 disclosure and still receive compensation from plan assets; and
• Making certain that all applicable completed schedules, are included, as well as the independent qualified public accountant’s opinion (more commonly known as the audit report). Fillings that are missing schedules or the audit report are essentially treated as if you failed to file, and the maximum penalties for failure to file have been increased, to a maximum of $2,063 per day (indexed) that the filing is outstanding after the due date.

Don’t forget From 8955-SSA— this form, which is completely separate from the Form 5500 and must be filed with the  IRS as opposed the Department of Labor (DOL), is used to report participants who have terminated employment and left assets on deposit in their employer’s retirement plan. These participants are reported to the Social Security Administration, which notifies the participants of the possible existence of such assets when they file for benefits. For filing details, see this page.

And finally, note that the filing deadline is NOT October 15, 2017, which would be the normal extended deadline, since October 15th falls on a Sunday. The actual deadline this year is October 16, 2017.

Best of luck with your 2016 5500 filing(s)!

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.