Form 5500 Compliance Questions Update

[austin3515]

Putting together a training with an IRS/5500 update. Any word on the status of the Compliance questions?  I know they are n/a for 2016, I'm just wondering if there is anything published about when perhaps they might be effective.  Any official guidance, etc.?

[Peter Gulia]

Recognizing the general anti-regulatory communications of the Trump Administration, one imagines that the Employee Benefits Security Administration, perhaps after its Assistant Secretary position and some other vacancies become filled, might delay again the previously delayed items.  Because to undo or change those items might call for the administrative-law work of making a rule, year-by-year delays seem likelier.

[austin3515]

Ha, I have a couple of slides on the new 5500 coming down the pike, and my last point is "will this ever happen??"  For example it seems hard to imagine Trump forcing every small health insurance plan to file a 5500.  That policy seems, well, dumb. Really really dumb.

[RatherBeGolfing]

As of right now, there is nothing official indicating if and when new compliance questions may be effective.  Unofficially, I have heard repeatedly that they don't even have the funding to use the "don't complete this section" compliance questions that are currently on the form, and the 5500 overhaul has similarly been put on ice.

From the comments at ASPPA last year, maybe by 2019... Janice W was one of those who said don't expect anything anytime soon, the money isn't there for it

[austin3515]

32 minutes ago, RatherBeGolfing said:

Unofficially, I have heard repeatedly that they don't even have the funding to use the "don't complete this section" compliance questions that are currently on the form

What do you mean by this?  I guess I can see where reprogramming the entire form would be a very costly endeavor, but why so for the compliance questions already there?

[RatherBeGolfing]

I think it is a mix of reprogramming and allocation of resources for the IRS.  On the DOL side it is a funding issue for sure.  

 

[austin3515]

I definitely believe you, I was just curious what would need additional funding since it's already there. Probably they don't even have enough people to keep up with day-to-day let alone implement a change.  I've been in those situations before for sure...

[RatherBeGolfing]

I think getting the questions on the form was the easy part.  actually getting the data and dealing with it is the costly part.  From what is going on with det letters, allocation of resources may be one of the bigger issues

[RatherBeGolfing]

And here is the latest update

ASPPA GAC Advocacy Efforts Pay Off as IRS Drops New Compliance Questions (For Now)

For those who are not ASPPA members or do not receive the newsletters, here are the highlights

A recent concern in this area has been the new IRS “compliance” or “5500-SUP” questions that were originally to be required for the 2015 form but have been delayed ever since. Those delays have come principally as a result of ASPPA GAC’s lobbying work. It now appears that the IRS is finally in agreement with ASPPA’s original recommendation, which was to roll out the new questions as part of the broader Form 5500 modernization initiative which is a tri-agency project which includes the DOL and PBGC.

The reason for the optimism is the recent filling by the Department of Labor (DOL) with Office of Management and Budget (OMB) of draft copies of the 2017 Form 5500, including the related schedules and instructions. (OMB approval is required under the Paperwork Reduction Act.) It is noteworthy that the 2017 form DOES NOT INCLUDE the new IRS “compliance” questions.

Lastly, the herculean effort made by many ASPPA members to assist in this lobbying effort should be noted. First and foremost, the ASPPA GAC Reporting and Disclosure Sub-Committee, chaired by Kizzy Gaul, continues to do a great job drafting our thoughtful and substantive comment letters. Also critical contributors to our efforts were senior advisors Janice Wegesin and Peter “Mad Dog” Gould who both took a great deal of time out of their otherwise busy schedules to further the cause, including coming into Washington to meet with OMB and IRS. And finally, a big thank you to all the ASPPA members who wrote their own individual comment letters when rallied to the cause by Mad Dog Gould. Those letters really did make a difference. ASPPA GAC will continue to monitor developments with regard to the ongoing modernization initiative and provide additional comments as it proceeds.
 

[My 2 cents]

A few days ago (April 15th), there was a link to the draft 2017 forms on BenefitsLink (always there when you need them!), and despite my best efforts, I could not even find the old compliance questions (other than those on the Schedule H).  The extra section at the end of the Schedule R, for example, wasn't even there.  So it looks as though, at least for 2017, it is a non-issue!

[RatherBeGolfing]

23 minutes ago, My 2 cents said:

A few days ago (April 15th), there was a link to the draft 2017 forms on BenefitsLink (always there when you need them!), and despite my best efforts, I could not even find the old compliance questions (other than those on the Schedule H).  The extra section at the end of the Schedule R, for example, wasn't even there.  So it looks as though, at least for 2017, it is a non-issue!

Yea and it makes more change to do all the changes at one time (the 5500 overhaul) rather than some IRS questions, one year, then some more IRS questions the next year, and then DOL and PBGC questions the year after that.

We should be good until the 2019 form or later barring another change of heart by the IRS

[Tom Poje]

unfortunately that means the one item that would have been nice is probably shelved until then.

for participant count only include those with balances. that would have eliminated some large plan audits

[RatherBeGolfing]

Well that item was always part of the DOL changes rather than IRS it wouldn't have been sooner effective before the major overhaul anyway.  But point well taken, that was one change I was looking forward to.  Many of the auditors I know weren't as happy about it though...

I also liked the idea of compliance questions rather than compliance codes as almost every 5500 i look at on a takeover has an issue with the codes...

[austin3515]

Hey whose to say Trump won't get the audit requirement change through sooner!  I could see that being rolled into a regulatory initiative more in the near-term as a way to eliminate "job killing regulations"

[chc93]

But, wouldn't that participant count stuff just be a change to the instructions?  Like in "What's New"? 

[Peter Gulia]

Even if the Labor department became motivated to pursue separately the change about which participants count to define a plan that must engage an independent qualified public accountant, many lawyers assume this change would require a rulemaking, which must meet the requirements of the Administrative Procedure Act and other laws for an agency’s rulemaking.

[My 2 cents]

And the elimination of two other regulations?