Before filing in 2023 and 2024 Form 5500s for retirement plans, employers should know about some key changes. The changes summarized in this advisory apply to 2023 reports, unless otherwise noted.

One of the bigger changes is the revised method for determining the 100-participant threshold for when a plan is treated as being small enough to use simplified reporting alternatives (including waiver of the annual audit requirements and using the short form version of the Form 5500). This counting methodology for defined contribution plans will now be based on the number of participants with account balances. Previously, the number of individuals who were eligible to participate (even if they did not have an account) was used. This may increase the number of employers that are eligible to use the simplified reporting.

Also notable are several new schedules enabling consolidated returns for additional categories of retirement plans. The first new schedule (DCG) allows defined contribution groups (DCGs) to file a single Form 5500 if several requirements are met. DCGs are defined contribution pension plans that have all plan assets in a single trust; have the same named plan administrators, trustees and fiduciaries; offer the same investments to all participants; and do not hold employer securities. The new Schedule DCG should allow more simplified and more consolidated Form 5500s for plan sponsors. Form 5500 schedules were also changed to help simplify reporting for multiple employer plans (MEPs) and create Pooled Employer Plans (PEPs), by streamlining Schedule MEP with respect to questions on PEPs. PEPs are a type of multiple employer plan. Multiple employer plans exist when employers who are unrelated participate in a single plan. Normally each employer in a multiple employer plan is treated as having their own plan, especially for reporting purposes. Under the new PEP rules, for reporting purposes, the PEP is treated as a single plan.

Several other schedules have or will be changed, including Schedules H, MB, SB and R. Draft forms and instructions are already available or will be later this year. The DOL’s final rule will be applicable for plan years beginning on or after January 1, 2023. Based on this timing, use of the new forms will likely begin in 2024 or later. According to the DOL’s Fact Sheet, certain changes that were proposed in September 2021 are being deferred as part of a separate improvement project. Employers should watch for further updates to the Form 5500 requirements.