Deliquent 403(b) Filings

[bzorc]

I just inherited a 403(b)(7) plan (not an organization exempt from filing under Title I of ERISA) that never prepared the old "limited filing" Form 5500's for the years it was in existence. I have been provided the necessary information to prepare the 2009 Form 5500-SF.

Using the new EFAST2, how do you think I should go about preparing the late returns? Using the limited filing option? Not filing the late returns and have the tear-stained letter ready? I don't think the client would be able to retreive the financial information for the late years, except for maybe 2005-2008.

Anybody have an opinion? Thanks for any replies!

[jpod]

I have this recollection that you need basically zero information for the pre-2009 403(b) filings. No dollars, no participant counts, no nothing. Not true?

[bzorc]

That's my impression, but if you have to use 2009 forms and show the old dates, would the DOL then be looking for financial information, or just the limited reporting information that was required in the past?

[mbozek]

I just inherited a 403(b)(7) plan (not an organization exempt from filing under Title I of ERISA) that never prepared the old "limited filing" Form 5500's for the years it was in existence. I have been provided the necessary information to prepare the 2009 Form 5500-SF.

Using the new EFAST2, how do you think I should go about preparing the late returns? Using the limited filing option? Not filing the late returns and have the tear-stained letter ready? I don't think the client would be able to retreive the financial information for the late years, except for maybe 2005-2008.

Anybody have an opinion? Thanks for any replies!

Since Title I 403b plans are not subject to the IRC 5500 penalties and prior to 2009 did not have file a full 5500, a 403b plan used to file 5500s for back years under the DOL program which imposed a fine of a $750 file for each years 5500 with a max fine of $1500. I dont know if this max fine/ program is still in effect.

I once filed back 5500 for a client who had not filed the forms for a 403b plan back to 1975 (about 25 forms). I took the 5500 for the most recent year, changed the date on the form for each year to correspond to each open year, answered the same 4 questions and enclosed a cover letter to the DOL describing what was being submitted. The DOL happily accepted the $1500 check and took no further action.

[Guest Matthew Gouaux]

I've used the same approach as mbozek. File the delinquent forms 5500 electronically and then send your DFVC Program submission on paper to the physical address provided.

[bzorc]

I've used the same approach as mbozek. File the delinquent forms 5500 electronically and then send your DFVC Program submission on paper to the physical address provided.

I agree with both answers, but how to file electronically? That's where I'm getting confused. Do I set up the initial year with a 2009 Form 5500 and just answer the limited reporting questions, and then replicate for each subsequent year? Use the 5500-SF? Instructions don't seem to make this easy.

[Guest Matthew Gouaux]

My understanding is that EFAST2 requires you to use the current year Form 5500 (or 5500-SF), and the prior years' instructions when filing delinquent returns under DFVCP. Because Form 5500 had been revised, you may need to connect the dots, that is, follow the substantive reporting requirements rather than the line numbers. For example, the 2008 instructions say to complete line 5, which for 2008 reported preparer information. Line 5 of the 2009 Form reports the number of participants in the plan, which is not required for a limited filing. You should not need to include a participant head-count just because the line numbers changed.

[bzorc]

My understanding is that EFAST2 requires you to use the current year Form 5500 (or 5500-SF), and the prior years' instructions when filing delinquent returns under DFVCP. Because Form 5500 had been revised, you may need to connect the dots, that is, follow the substantive reporting requirements rather than the line numbers. For example, the 2008 instructions say to complete line 5, which for 2008 reported preparer information. Line 5 of the 2009 Form reports the number of participants in the plan, which is not required for a limited filing. You should not need to include a participant head-count just because the line numbers changed.

You are correct. I contacted EFAST2 yesterday and they informed me that the limited reporting requirements apply to all late 403(b)(7) Plan filings. The entering of the appropriate plan chararcteristic code (2M for a 403b7 plan) lets them know you are only providing the limited reporting information.

Thanks for all the replies and help!