5500 electronic signature when service provide e-signs.

Almost all of our clients hand sign the 5500 and a signing authorization.  Over the early years of EFAST, clients just stopped wanting use/recover their PINs.  One client just now did an electronic signature on the 5500 copy that we will attach to the filing before I e-sign.    I'm sure ths has been discussed many times but appreciate comments on this.  There is still time to get a hand signature but not much time.

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/efast2-form-5500-processing.pdf

Quote

Q33a: I am a service provider that assists clients in managing the filing process. Can I electronically sign the annual return/report for my client?

Yes, if the plan administrator has authorized you to submit electronically the Form 5500/5500- SF/5500-EZ for the plan.

Under the e-signature option, service providers that manage the filing process for plans or Direct Filing Entities (DFEs) can get their own EFAST2 signing credentials and submit the electronic Form 5500 for a plan or DFE, or Form 5500, Form 5500-SF or Form 5500-EZ for a plan. The service provider must have specific written authorization from the plan administrator, employer/plan sponsor, or DFE to submit the filing. In addition, the plan administrator, employer/plan sponsor, or person authorized to sign on behalf of the DFE, including the “jurat,” must manually sign a paper copy of the applicable completed form, and the service provider must attach a PDF copy of the manually signed form (without schedules or attachments) to the electronic filing submitted to EFAST2.

Thank you CB.  I had just received one and thought I'd check if the rules changed on this.  Thanks - I have to time get the client to hand sign, not much time, but enough.

For authorization so file 5500 on behalf of clients, we get them to sign the authorization form every year. Is that necessary? Is one authorization good enough for future submissions?

Even if the Labor department might allow such a standing-instruction authority, what records would the TPA keep to prove that, each year, the plan’s administrator had read and approved the year’s report?

If the available evidence suggests the TPA compiled the Form 5500 report and does not prove that the plan’s administrator reviewed and approved it, was the TPA the plan’s administrator and fiduciary to the extent of that reporting?

If the service provider follows the procedures in the FAQ33a (see @C. B. Zeller's post above) and the service provider electronically signs the filing, the FAQ says "Under the e-signature option, the name of the service provider who affixed their own electronic signer credentials will not appear as the “plan administrator,” “plan sponsor,” or ”DFE” in the signature area on the image of the form that DOL posts online for public disclosure. The name will also not be disclosed as the electronic signer in publicly posted Form 5500 datasets or the public EFAST2 Filing Search application."

Further, the FAQ says:

"The IFILE application includes a statement for service providers that use this electronic signature option.  The statement says that, by signing the electronic filing, the service provider is attesting that:
• the plan administrator/sponsor/DFE has authorized the service provider in writing to electronically submit the return/report;
• the service provider will keep a copy of the written authorization in their records;
• in addition to any other required schedules or attachments, the electronic filing includes a true and correct PDF copy of the completed Form 5500 (without schedules or attachments), Form 5500-SF, or Form 5500-EZ return/report bearing the manual signature of the plan administrator, employer/plan sponsor, or DFE, under penalty of perjury;
• the service provider advised the plan administrator, employer/plan sponsor, or DFE that, by selecting this electronic signature option, the image of the plan administrator’s, employer/plan sponsor’s, or DFE’s manual signature will be included with the rest of the return/report that the DOL posts online for public disclosure; and
• the service provider will communicate to the plan administrator, plan sponsor/employer, or DFE signees any inquiries and information received from EFAST2, DOL, IRS, or PBGC regarding the return/report."

The short version of all of this is the service provider should keep everything for each year.  The written authorization does not say explicitly that it must be provided each year. Having a standing election runs the risk of it not being updated when the individuals involved change.  The requirement to attach a "true and correct PDF copy" of the completed form "bearing the manual signature of the plan administrator" will be unique for each year. Getting the authorization concurrently with the manually signed form seems to be a best practice.

To answer @Peter Gulia's question, this process is designed to require proof the plan administrator retains the responsibility to review and approve the filing, and that proof must be attached to the filing.

7 hours ago, Peter Gulia said:

Even if the Labor department might allow such a standing-instruction authority, what records would the TPA keep to prove that, each year, the plan’s administrator had read and approved the year’s report?

If the available evidence suggests the TPA compiled the Form 5500 report and does not prove that the plan’s administrator reviewed and approved it, was the TPA the plan’s administrator and fiduciary to the extent of that reporting?

I don't think that's possible. Under these circumstances, the plan Sponsor always signs the 5500, so their signature is the confirmation they have reviewed it.  Was just curious about the separate authorization form.

My point was this:

If, instead of getting the plan administrator’s signatures each year, a service provider were allowed to rely on a standing-instruction authority that continues indefinitely until revoked, a service provider might lack records to prove that the plan’s administrator had read and approved each year’s report.

Under ERISA § 3(21)(A)(iii), “a person is a fiduciary with respect to a plan to the extent . . . [the person] has any discretionary authority or discretionary responsibility in the administration of such plan.” Many interpretations of ERISA § 3(21) look past formal labels and consider whether a service provider had or used discretion. Even compiling a Form 5500 report might involve some arguably discretionary choices about how information is reported.

If there were no record that the plan’s administrator reviewed and approved a particular year’s Form 5500 report and the available evidence suggests the TPA compiled the Form 5500 report, I can imagine an argument that the TPA was the plan’s fiduciary to the extent of its discretion had or used for that reporting.

While I see that a standing-instruction authority is possible, a cautious service provider might prefer a showing that the plan’s administrator granted authority to file the particular year’s report.

Consider, an email or fax (perhaps one that sends the manually signed Form 5500 page), if it includes the authorizing person’s name, can be an electronic record, and even an electronic signature. 15 U.S.C. § 7006.

This is not advice to anyone.