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5500 Proposed Revisions


austin3515
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That's a fascinating question actually. It seems to me it is an individual protection though and not to non-human enterprises. But then again I do not include J.D. in my listing of credentials and rightly so!

"No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."

Austin Powers, CPA, QPA, ERPA

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my brief look at the "Readers Digest condensed version" would seem to imply that much of the info pertains to group health plans, which means much of the large version of 777 pages is not applicable, at least to what I do.

the biggest highlight I found was the following pertaining to small plans that can't file a 5500-sf:

elimination of Sched I forcing you to use sched H

Under the proposal, such plans instead would be required to complete Schedule H and the Line 4i Schedules of Assets

However: such plans

would still be eligible for a waiver of the annual examination and report of an IQPA under 29 CFR 2520.104-46, and the number count required to determine eligibility would be changed from the number of participants at the beginning of the plan year to the number of participants with account balances at the beginning of the plan year.

if that rule applies across the board to all plans, that would eliminate audits for a number of plans that have a lot of 4101k plans with non-participants.

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there it is page 62 of the 777 page document -


The Agencies are also proposing to change the rules for determining when a plan is
exempt from the requirement to include an IQPA report with its filing. In that regard, the
Agencies are proposing to add to the Form 5500 a new question, for defined contribution pension
plans only, asking for the number of participants with account balances at the beginning of the
plan year. Defined contribution pension plans would determine whether they have to file as a
large plan and whether they have to attach an IQPA report based on the number of participants
with account balances as of the beginning of the plan year, as reported on the face of the Form
5500 or Form 5500-SF. Currently, the IQPA requirement is based on the total number of
participants (including those eligible but not participating in a Code section 401(k) or 403(b)
plan) at the beginning of the plan year.
With the changes in the reporting requirements for small
plans (for example, the elimination of the Schedule I), this would minimize burden, but would
still provide a picture of the types of investments and fees of small plans (plans with fewer than
100 participants that have an account balance) without requiring them to cover the cost of an
audit. For first plan year filings, the plan would have to have fewer than 100 participants with
account balances both at the beginning of the plan year and the end of the plan year.

"and there was much rejoicing!"

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Any word on when this would be effective?

Page 14 (link in Post #1) includes the following:

As with previous major forms revisions cycles, the Agencies anticipate actively engaging in outreach and education regarding the forms revisions well in advance of the plan year for which the majority of the revisions would be effective.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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Among other changes some of us are beginning to spot, the revised instructions would state:

The statute of limitations under [internal Revenue] Code section 6501(a) for any trust described in section 401(a) . . . will not start to run until you timely file with the appropriate trust information on this Form.

See pages 518 and 700.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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These revisions, which are being proposed in conjunction with a recompete of the ERISA Filing and Acceptance System (EFAST2) contract, if adopted, generally would apply for plan years beginning on or after January 1, 2019."

of course the reason for the delay is so people can make comments like

"But I like having to gat an audit for a plan with over 100 people and only 37 have balances"

personally I would hope someone with power could get them to at least get this one provision to apply effective "yesterday".

I don't think I ever used the word 'recompete', at least not like how it is used here, but I guess this particular change would be far superior than to what we have.

and Austin, I think you are understating the impact!

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I have to say Tom, once they let that cat out of the bag it would seem to me there would be a clamoring to get that effective 1/1/2017. OF all the changes, this seems to be the one that would be limited to changing 5 or 6 words in the instructions. No new technology, no revisions whatever to the form itself. Instant relief.

I hope ASPPA pounces on this!!

Austin Powers, CPA, QPA, ERPA

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To get a sense of how the proposed reporting changes relate to a software revision, search the .pdf for the document's five uses of the word "recompete" and read the text surrounding those uses.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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There's another good proposed change on page 133. The IRS wants to have an electronic version of Form 5558 that would be processed through EFAST2. Hopefully, that will end the 3+ months processing time we've had in prior years for the 2.5 month extensions.

Noting that the IRS has had difficulty promptly adjusting their records to recognize that a Form 5558 has been filed, there should be no problem to solve. Timely filing a Form 5558 to extend the filing deadline for the 5500 and the 8955-SSA is all it takes. IRS approval is not required. If the Form 5558 is completed properly and submitted on time, the IRS has ceded all authority to reject such a filing.

One problem with electronic filing is that an EFAST account would be necessary. At present, anyone can submit a Form 5558 to obtain the extension. No signatures, no permissions are needed to get the 5500 and 8955-SSA extended. It is probably not uncommon for TPAs to submit 5558s for all clients en masse, without having to discuss the issue on a client by client basis.

Always check with your actuary first!

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There's another good proposed change on page 133. The IRS wants to have an electronic version of Form 5558 that would be processed through EFAST2. Hopefully, that will end the 3+ months processing time we've had in prior years for the 2.5 month extensions.

Noting that the IRS has had difficulty promptly adjusting their records to recognize that a Form 5558 has been filed, there should be no problem to solve. Timely filing a Form 5558 to extend the filing deadline for the 5500 and the 8955-SSA is all it takes. IRS approval is not required. If the Form 5558 is completed properly and submitted on time, the IRS has ceded all authority to reject such a filing.

I'm guessing you haven't had the IRS send a letter to some of your clients claiming a Form 5500 was filed late and a penalty will apply because the IRS did not process the 5558 timely. We had one client receive two of those letters in a four year period. After getting a power of attorney signed and wasting time on hold, the matter was quickly resolved once I was able to speak to a live person at the IRS. I don't enjoy extra non-billable work and having clients think we missed a deadline that we did not miss just because the IRS waited until November to process some extensions filed in July after they sent out late filing notices in October.

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