Compliance December 7, 2015

Form 5500 Deadline Extension Repealed

A provision in a new law will return Form 5500 deadlines to what they were before the Surface Transportation and Veterans Health Care Choice Improvement Act was passed.
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Tucked inside the newly passed Fixing America’s Surface Transportation (FAST) Act of 2015 is a provision setting the deadline for Form 5500 filing extensions back to two and one-half months after the original filing deadline.

The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, signed by President Obama on July 31, 2015, extended the due date to three and one-half months after the filing deadline, or November 15. The new bill repeals this extension; for calendar-year plans this means the deadline for filing an extension, if requested, is October 15.

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Phyllis C. Borzi, assistant secretary of labor for the Department of Labor’s (DOL) Employee Benefit Security Administration (EBSA), had said she would urge Congress to repeal the deadline extension. She explained that the bill extended the deadline for filing with the Internal Revenue Service (IRS), but not the DOL. “We felt blindsided by this, and we think it was a move in the wrong direction, especially since the Government Accountability Office and Office of Inspector General have asked us to get the information sooner,” Borzi said.

Compliance December 7, 2015

Items Coming from the GASB in December

The Governmental Accounting Standards Board has announced a number of projects it will complete before the end of 2015 that will affect government pensions.
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The Governmental Accounting Standards Board (GASB) plans to issue guidance related to pensions through two separate standard-setting projects: Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans, and Pension Issues.

In December, the Board plans to issue guidance to assist governments participating in certain private-sector or federally sponsored multiple-employer defined benefit pension plans that do not have access to information required by the new GASB pension standards, which took effect this summer. Plans envisioned to be addressed by the guidance include Taft-Hartley plans and plans with similar characteristics.

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Stakeholders alerted the Board that a small number of governments do not have access to the information required to comply with the new pension standards when they participate in certain private-sector or federally sponsored multiple-employer plans. To address this issue, the Board proposed in October to scope these governments out of GASB Statement 68 (Accounting and Financial Reporting for Pensions) requirements and to provide them with alternative guidance.

The forthcoming Statement will set separate standards for employers participating in certain multiple-employer pension plans that have specific characteristics. These standards will address recognition and measurement of pension expense and liabilities, note disclosures, and required supplementary information.

More information about the project can be found here.  

NEXT: Pension standards and fiduciary activities

This month, the GASB expects to issue an Exposure Draft containing proposed guidance to address certain issues raised by stakeholders during the implementation of the new GASB pension standards.

The proposal addresses:

  • Issues related to presentation of payroll-related measures;
  • Issues related to employer-paid member contributions; and
  • Issues related to deviations from the guidance in Actuarial Standards of Practice.

The Board plans to issue a final Statement in early 2016. More information about the project can be found here. 

The GASB is also expected to issue an Exposure Draft in December about accounting and financial reporting for fiduciary activities.

Currently, governments are required to present financial statements regarding their fiduciary activities in their fiduciary fund financial statements. However, the concept of what constitutes fiduciary activity is not clearly defined. GASB research and inquiries from stakeholders have indicated there is diversity in practice in the current reporting of various types of fiduciary activities.

In the Board’s forthcoming Exposure Draft, it will propose specific criteria for when and how a government would report a fiduciary activity. The proposal will also address classification of fiduciary funds and recognition of fiduciary fund liabilities.

The Board is scheduled to issue a final Statement in late 2016. More information about the project can be found here.

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