The U.S. Department of Labor's Employee Benefits Security Administration, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation released advance informational copies of the 2018 Form 5500 annual return/report and related instructions. The "Changes to Note" section of the 2018 instructions highlight important modifications to the Form 5500 and Form 5500-SF:
- Principal Business Activity Codes. Principal Business Codes have been updated to reflect certain updates to the North American Industry Classification System (NAICS).
- Administrative Penalties. The instructions have been updated to reflect an increase to $2,140 per day in the maximum civil penalty amount assessable under Employee Retirement Income Security Act section 502(c)(2), as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The increased penalty under section 502(c)(2) is applicable for civil penalties assessed after January 2, 2018, whose associated violation(s) occurred after November 2, 2015.
- Form 5500-Participant Count. The instructions for Lines 5 and 6 have been enhanced to make clearer that welfare plans complete only Line 5 and elements 6a(1), 6a(2), 6b, 6c, and 6d in Line 6.
- List of Plan Characteristics Codes for Lines 8a and 8b (Lines 9a and 9b for SF filers). Plan characteristic code 3D, has been updated to reflect the IRS changes on the pre-approved plans as prescribed in Revenue Procedure 2017-41, 2017-29 IRB 92.
- Schedule MB-Contributions. The instructions for Line 3 have been modified to require an attachment in situations where a reported contribution includes a withdrawal liability payment.
- Schedule MB-Plan in Critical Status or Critical and Declining Status. The instructions for Line 4f (where plans expected to become insolvent or emerge from troubled status report the year in which such insolvency or emergence is expected to occur) have been modified to require an attachment providing additional information about how that year was determined. In addition, the instructions now include guidance about what to report if a troubled plan is neither projected to emerge from critical status nor become insolvent within 30 years.
- Schedule SB-Mortality Tables. Line 23, where filers check a box to indicate which set of mortality tables is used, has been updated to provide additional options available under Treas. Reg. § 1.430(h)(3). The instructions for Line 23 have been modified to reflect this change.
- Schedule SB. Schedule SB has been updated to reflect the issuance of Revenue Procedure 2017-56 with respect to change in funding methods. Line 23 has been updated to reflect final regulations prescribing mortality tables to be used by most defined benefit pension plans. Line 27, Codes 5 and 8 are no longer applicable and should not be used. Lines 42 and 43 have been removed; pursuant to the Pension Relief Act of 2010, there are no installment acceleration amounts or installment acceleration amount carryovers after the 2017 plan year.
- Schedule R. Schedule R has been updated to reflect the issuance of Revenue Procedure 2017-56, 2017-44 IRB 465, with respect to the change in funding methods. Also, the Schedule R instructions under "Who Must File" have been updated to reflect the removal from Schedule R of certain IRS compliance questions.
The advance copies of the 2018 Form 5500 are for informational purposes only and cannot be used to file a 2018 Form 5500 annual return/report. Pension and welfare benefit plans that are required to file an annual return/report regarding their financial conditions, investments and operations each year generally satisfy that requirement by filing electronically the Form 5500 or Form 5500-SF and any required attachments under the all electronic EFAST2 system for submission, receipt, and processing of the Form 5500 and Form 5500-SF.
Informational copies of the forms, schedules and instructions are available online at https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500. Filers should monitor the EFAST website for the availability of the official electronic versions for filing using EFAST-approved software or directly through the EFAST website. Assistance with the EFAST2 system is available at https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/forms/efast2-form-5500-filing-tips or by calling 1-866-463-3278.