“You may be aware that the IRS has proposed this. What you may not be aware of is that it’s actually gone a lot farther than that.” With that remark, Janice Wegesin, President of JMW Consulting, in a recent ASPPA webcast on the Form 5500, cautioned attendees that the proposed Form 5500 SUP is on the horizon — and that they need to be prepared.
Wegesin called the Annual Return of Employee Benefit Plan Supplemental Information “this scary new form,” and said it is in a “big state of flux.” She noted that the Form 5500 SUP was submitted to the Office of Management and Budget (OMB) this May, but that the draft she saw at the June EFAST 2 conference held in Minneapolis was different than that version.
And not only has the Form 5500 SUP itself been drafted — Wegesin added that for good measure, “the questions that appear on the draft Form 5500 SUP are embedded in the 2015 Form 5500 and the Form 5500-SF.”
Wegesin highlighted a variety of issues the form raises, but one of the most fundamental is the amount of extra work it will create. She said, “What’s really problematic is that in its OMB submission, IRS stated that the collection of this SUP data created no additional burden for filers.” She added, “I don’t know how you can add the amount and type of questions that they did to the Form 5500 and say it takes no additional time to complete this form.”
Not only that, Wegesin noted, the IRS also dismissed public comments on the proposed form except those that supported it and took the “more is better” approach to data collection.
And when will the Form 5500-SUP have to be submitted? Current plans are for it to be required for reporting on the 2015 plan year. But even if it is delayed and not required for 2015 reporting, Wegesin said that she “thinks it’s safe to say” that it would “appear with the 2016 reporting cycle.”
One of the biggest problems with the effective date as now scheduled, Wegesin said, is the need to adapt electronic systems. In addition, she noted that it is possible that some issues with the form may not be finalized by the due date.
Another major issue with the form concerns public disclosure. “The IRS doesn’t seem to care” that the information reported on the Form 5500 SUP could be available through public disclosure, she noted. That information includes a preparer’s name and client list. “It seems odd that an agency would require public disclosure of a paid preparer’s client list,” she remarked, adding “I’m not sure any good will come from having the preparer’s name appear on the 5500.”
And there are other issues concerning the Form 5500 SUP as well, including plan documents issues, 401(k) testing, coverage testing, unrelated business taxable income and in-service distributions.
To access the webcast in its entirety, click here.
Wegesin called the Annual Return of Employee Benefit Plan Supplemental Information “this scary new form,” and said it is in a “big state of flux.” She noted that the Form 5500 SUP was submitted to the Office of Management and Budget (OMB) this May, but that the draft she saw at the June EFAST 2 conference held in Minneapolis was different than that version.
And not only has the Form 5500 SUP itself been drafted — Wegesin added that for good measure, “the questions that appear on the draft Form 5500 SUP are embedded in the 2015 Form 5500 and the Form 5500-SF.”
Wegesin highlighted a variety of issues the form raises, but one of the most fundamental is the amount of extra work it will create. She said, “What’s really problematic is that in its OMB submission, IRS stated that the collection of this SUP data created no additional burden for filers.” She added, “I don’t know how you can add the amount and type of questions that they did to the Form 5500 and say it takes no additional time to complete this form.”
Not only that, Wegesin noted, the IRS also dismissed public comments on the proposed form except those that supported it and took the “more is better” approach to data collection.
And when will the Form 5500-SUP have to be submitted? Current plans are for it to be required for reporting on the 2015 plan year. But even if it is delayed and not required for 2015 reporting, Wegesin said that she “thinks it’s safe to say” that it would “appear with the 2016 reporting cycle.”
One of the biggest problems with the effective date as now scheduled, Wegesin said, is the need to adapt electronic systems. In addition, she noted that it is possible that some issues with the form may not be finalized by the due date.
Another major issue with the form concerns public disclosure. “The IRS doesn’t seem to care” that the information reported on the Form 5500 SUP could be available through public disclosure, she noted. That information includes a preparer’s name and client list. “It seems odd that an agency would require public disclosure of a paid preparer’s client list,” she remarked, adding “I’m not sure any good will come from having the preparer’s name appear on the 5500.”
And there are other issues concerning the Form 5500 SUP as well, including plan documents issues, 401(k) testing, coverage testing, unrelated business taxable income and in-service distributions.
To access the webcast in its entirety, click here.
ASPPA also offers on-demand webcasts — access to recordings of webcasts (including both audio and visual portions of the presentation) approximately one week following the original live webcast presentation. These recordings are available for 1 year after the date of the original live webcast. For a list of the currently available recorded webcasts, click here.
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