Beginning with the 2009 plan year, the Department of Labor (DOL) will require retirement and welfare plans to file their annual reports, the Form 5500, electronically. This new electronic filing system is called EFAST2. The transition from paper filing to electronic filing will result in significant changes in procedures. Although the 2009 Form 5500 is not filed until 2010, plan sponsors should start now to get ready for this big change. The EFAST2 is expected to be operational as of January 1, 2010.
A plan's third party administrator (TPA) will still be able to prepare the Form 5500 and help facilitate the electronic filing. However, the plan sponsor is required by the DOL to obtain electronic signature credentials. The following Q & A, is an excerpt from a larger "
Technical Update" article available on the SunGard Relius website; it focuses on information for plan sponsors related to filing the Form 5500 using electronic signature credentials.
Q. Must all retirement plans file the Form 5500 electronically?
A. With the exception of a plan covering the sole owner (and his/her spouse) or partners in a partnership (and their spouses) and no employees ("owner only plan"), all plans, including retirement, welfare and 403(b) plans, will need to file their 5500s electronically.
Q. How does the plan sponsor obtain electronic signature credentials?
A. The plan sponsor will go to a DOL website (IREG) and enter certain personal information. The plan sponsor then will receive an email with a link to a website where the sponsor will receive the credentials (signor ID and PIN code). The credentials are personal to the individual obtaining the credentials. If a plan sponsor might have different company officers signing the 5500, each officer would need to obtain his/her own credentials.
Q. May a TPA or financial institution obtain signer credentials on behalf of its clients?
A. No. Every individual who signs a Form 5500 or schedule must obtain his/her own signer credentials. Furthermore, the government limits one set of credentials per e-mail address.
Q. How do I use the electronic signature credentials in filling a Form 5500 electronically?
A. If the plan sponsor is completing its own filing, the plan sponsor will enter the electronic signature (signor ID and PIN code) in the appropriate place on the forms and then transmit the filing. For filers using a Web-based filing system (private or DOL), the filer will invite the plan sponsor to an "electronic signing ceremony" where the plan sponsor will enter its credentials and the form will be submitted.
Q. How do I file a plan audit electronically?
A. If the plan is subject to the audit requirement, the DOL requires the auditor to complete the audit on its firm's letterhead with the name of the firm and its address. The audit must be signed by the accountant completing the audit. The filer then scans the audit into PDF format and attaches it to the Form 5500 filing.
Q. May a plan file its Form 5500 without the accountant's opinion?
A. Unless the plan is exempt from the accountant's opinion requirement (also known as the audit requirement), the filer may NOT file the Form 5500 without the accountant's opinion. The DOL will not accept the filing without the audit.
Please
contact us with questions about EFAST2, the new electronic filing process for the Form 5500.