Ask the Experts July 9, 2013

(b)lines Ask the Experts – Delaying Form 5500 Reporting

July 9, 2013 (PLANSPONSOR (b)lines) - "As I was enjoying the July 4th Holiday, I found myself waxing nostalgic for the days when I would be filing our 5500 annual report for our Employee Retirement Income Security Act (ERISA) 403(b) plan this time of year (our plan year is calendar).
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“Now, with audits and such, it seems that we are always extending the filing deadline to October 15. I am not a procrastinator by nature, and the filing now comes during a busy period as we are working on our annual open enrollment for all of our benefits. Is it possible to file the form earlier even with an audit? Is everyone else waiting for October as well?”  

Michael A. Webb, Vice President, Retirement Plan Services, Cammack LaRhette Consulting, answers:

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The Experts emphasize with you, as we are not procrastinators, either!  And indeed, prior to 2009, there was no reason to delay, since 403(b) plan sponsors were required to answer only a handful of questions, many entities filed their forms well before the July 31 deadline for calendar year plans.

However, audits do indeed take several months to complete, and the experience in the corporate world, where audits of 401(k) and other qualified plans have always been required, is that most plan sponsors extend their time to file until October 15. The reason audits can be lengthy is that not only must vendor financials be meticulously reviewed, but payroll records as well.

Given the length of the audit process, must you and other plan sponsors wait until the last minute to file? Not necessarily. Touch base with your auditor; explain that you would like to file as early in the year as possible. The Experts suspect the auditor will be able to provide suggestions as to action steps you can take on your end to ensure the process is completed in as an efficient fashion as possible. The Experts can make no promises of a return to the good old days of July filings, but perhaps the completed return and audited financials can be filed sometime prior to your busy open enrollment period.

Even if that is not the case, the Experts would suggest you NOT wait until the absolute last day to file. If you discover something is wrong at the last minute, there is no time to correct. And, as with all websites, the EFAST website processing speed may be affected by the heavy traffic to the site that likely takes place nears filing deadlines.

Good luck with enhancing the speed of your process, and the Experts hope that you (and all of our readers) had a wonderful Independence Day!

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.
Products July 8, 2013

Northern Trust Enhances Performance Attribution Tools

July 8, 2013 (PLANSPONSOR.com) – Northern Trust Corporation has launched an enhanced version of its performance attribution tools.
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The enhancement consists of the implementation of daily security-level detail for fixed income within its Investment Risk and Analytical Services (IRAS) product suite for investment managers and institutional investors.

Northern Trust is using a “Successive Pricing” model to provide a fixed income analysis tool, leveraging the company’s performance data. It is fully integrated with the company’s IRAS Fundamentals ad hoc analysis application and is intended for clients seeking to better understand the sources of return in their investment portfolios. By analyzing the relationship of a security to market factors such as interest rate and foreign exchange changes, the model is intended to account for performance on a variety of fixed income instruments including bank loans, swaps, options, repos, and futures.

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“Our new daily security-level attribution model allows Northern Trust to deliver a more granular breakdown of returns generated within fixed income portfolios,” said James Haran, senior product manager for IRAS at Northern Trust. “While we have been able to provide fixed income attribution for many years, this model enhances our ability to highlight individual market factors such as curve, carry, yield, duration, and maturity and the resulting impact on client portfolios.”

According to Haran, the model analyzes the securities within a portfolio and benchmark to determine the pricing impact resulting from changes in underlying markets, and is integrated with other performance and risk reporting, so clients can see absolute and relative returns along with risk metrics on their portfolios.

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