5500-SF Prep/Filing

[Cloudy]

What is a reasonable estimate for time spent by an experienced retirement plan administrator to prepare a 5500-SF filing for a DB plan including AFN, considering the assets and the participant counts have already been reconciled, the actuarial valuation report has already been completed, and the valuation software produces attachments, AFN info, etc. (Datair)? This is for plain vanilla situations, no life insurance, etc. Excluding time spent for the 8955, I am thinking 3 hours to get the it to the client for signature, and another hour or so to get it filed, is that a reasonable expectation on average?

[Effen]

Are you contemplating doing something you have never done, or are you trying to confirm if you employees are taking too long?

A lot depends on how serious you take them to start with.  Are they something you want to be 100% accurate and completed in accordance with the instructions, or is it "government work" that just needs to be completed so that it won't bounce back?  Will you charge the client if they get bounced or will you eat that time?   There are people who make their living explaining how to do 5500s.  They can suck a lot of time if you want them to be perfect.

Are you doing full 5500 w/ audits, or EZs and SFs?  Big difference in cost and auditor interaction. Are you counting time for the SB, including verification of contributions, obtaining sponsor elections, maintenance of FPB/COB?  A lot depends on how you classify the time.

I think your timing is reasonable for an EZ or SF, but would double or triple for full 5500 w/ audit requirements. 

In general,  they take about 2X the amount you are able to bill for them.  

Also, consider posting on the 5500 board - you may get better responses.

[outdooractuary]

Effen makes a bunch of great points about the differences in complexity in plans as well as the potential differences in the quality of 5500 filings. 

There are additional things to consider as well, are you using Datair Pension Reporter? Is everything being entered by hand? Do you have an automated or semi-automated process in place? Are you including review time? What level of review does your firm require (clearly an actuary is reviewing the sch sb, but is the 5500 peer reviewed? actuary reviewed? The AFN?)? 

All of that being said at my former employer where we used datair as a val system, but ftwilliam for 5500 filings and had a mostly automated process in place for the sch sb I would guess that in pure prep time your estimate would be a little high. We did a ton of 3rd party actuarial work and with the processes that we had in place a junior admin could prep a sch sb and afn in 40 minutes or so (again this is a pure vanilla plan, no surprises). We had one whiz kid for a while that liked to time himself, he was under 20 minutes for a sch sb and under 30 for sch sb and afn. I would guess that 5500SF, sch sb and afn would have been 1.5-2 hours.  This is assuming val is done, contributions confirmed, trust reconciliation complete, etc. before work is started. 

But to go with that we had a very robust review process that ensured that all the i's were crossed and t's dotted. I would guess that review would add anywhere from 10 minutes to 45 minutes depending on which actuary was reviewing.  

[Draper55]

It depends whether the actuary is going to do test case calculations...is your valuation report etc being accepted as good or is  the reasonableness and quality of the numbers in that report being scrutinized ..you get what you pay for...

 

[Effen]

Draper - I was going to ignore your response, but I am curious what you are referring to?  The OP was about the time necessary to prepare 5500.  How are sample lives relevant to the 5500 prep? 

I would consider sample life review to be a necessary part of the valuation process, but would not consider it as part of the 5500 process.  Are you are suggesting there are actuaries who just blindly sign SBs without actually reviewing the work? 

To clarify my initial response - I was NOT considering the work to prep/review the valuation as part of the cost of the 5500.