On November 1, 2016, the US Department of Labor (DOL) released advance copies of the 2016 Form 5500 and Form 5500-SF annual return/report and their related schedules and instructions. Information copies of the 2016 forms, schedules and instructions are available on the DOL’s website. The advance copies were released for informational purposes only, and may not be used for filing. Official versions of Form 5500 and Form 5500-SF should be posted on the DOL’s website early next year.     

Summary of Changes for 2016 Reporting

Although the Internal Revenue Service (IRS) previously had added compliance questions to the 2016 Form 5500, Form 5500-SF, Schedules H, I and R, it subsequently decided that plan sponsors should not answer these questions for the 2016 plan year amid privacy and misreporting concerns raised by the retirement plan community. Accordingly, plan sponsors should skip the following questions when completing the forms for the 2016 plan year, effective for reporting due in 2017 for calendar year plans. 

• Form 5500

  • Plan sponsors should not complete the "Preparer's Information" at the bottom of the first page of the 2016 Form 5500.

• Schedule H

  • 2016 plan year; plan sponsors should not answer the compliance questions at Lines 4o and 6a–d.

• Schedule I

  • 2016 plan year; plan sponsors should not answer the compliance questions at Lines 4o and 6a‒d.

• Schedule R

  • 2016 plan year; plan sponsors should not complete Part VII (Lines 20a‒b, 21a‒b and 22a–b).

• Form 5500-SF

  • Plan sponsors should not complete the "Preparer's Information" at the bottom of the first page of the 2016 Form-SF.

  • 2016 plan year; plan sponsors should not complete Part VIII (Lines 14a‒d) and Part IX (Lines 15a–b, 16a–b, 17a-b, 18 and 19).

Many readers will notice that the above completion instructions for the 2016 Form 5500 are very similar to the completion instructions for the 2015 Form 5500.

Changes to Note

The "Changes to Note" section of the 2016 instructions highlights revisions to the Form 5500 and Form 5500-SF and their applicable schedules and instructions:

• Administrative Penalties. The 2016 instructions reflect the increase in the maximum civil penalty amount assessable for a plan sponsor who fails or refuses to file a complete or accurate Form 5500 report. As we previously reported, DOL regulations published in July increased the maximum penalty for a late filing from $1,100 each day to $2,063 a day. Reduced penalties are still available through the DOL's Delinquent Filer Voluntary Compliance Program (DFVCP).

• Schedules H and I. The Pension Benefit Guaranty Corporation (PBGC) uses a secure web-based application called the “My Plan Administration Account” (My PAA) that enables pension plan sponsors to electronically submit premium filings and payments. The existing Line 5c question asks whether plans that self-identify as defined benefit plans are covered by the PBGC insurance program. The modified question requires plan sponsors that answered "Yes" to that question to enter the My PAA-generated confirmation number for the PBGC premium filing for the plan year.

• Schedule SB. The instructions for Cooperative and Small Employer Charity plans (CSEC), reported on Line 27, Code 1, have been updated to reflect guidance on certain issues relating to the application of the Cooperative and Small Employer Charity Pension Flexibility Act.

Expanded Reporting Beginning in 2019

In July, the DOL, IRS and PBGC announced a proposal to make significant changes to the forms and regulations that govern annual employee benefit plan reporting on Form 5500. The proposed changes would significantly increase reporting obligations for health and welfare plans, and for retirement plans. According to the proposed revisions, the changes are intended to increase transparency, improve data mining and modernize financial information filed by plan sponsors. The proposed reporting requirements, if adopted, generally would apply for plan years beginning on and after January 1, 2019, effective for reporting due in 2020.