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DOL Issues Temporary Form 5500 Relief for ERISA MEPs

Technical Resources

The Department of Labor (DOL) has issued temporary penalty relief related to certain Form 5500 requirements for multiple employer plans (MEPs) subject to ERISA §103(g). The relief is contained in Field Assistance Bulletin (FAB) 2019-01, which the DOL issued on July 24. 

Under §103(g) of ERISA, MEPs are required to file complete and accurate lists of participating employers with their Forms 5500, as part of a public reporting system. 

A provision of the Cooperative and Small Employer Charity Pension Flexibility Act (Pub. L. No. 113-97, § 104(c) (CSEC Act)), enacted in 2014, added §103(g) to ERISA. It provides: 

With respect to any multiple employer plan, an annual report under this section for a plan year shall include a list of participating employers and a good faith estimate of the percentage of total contributions made by such participating employers during the plan year. 

The new reporting requirement became effective for plan years beginning after Dec. 31, 2013. The DOL issued an interim final rule in November 2014 that implemented ERISA §103(g) and added the new requirements to the Form 5500 at Part I, Line A, Annual Report Identification Information. Specifically, the rule added the text next to the check box for multiple employer plans: “(Filers checking this box must attach a list of participating employer information in accordance with the form instructions).”

The DOL’s Employee Benefits Security Administration (EBSA) found that a substantial number of MEP filers were not in full compliance with this reporting obligation. The DOL continues to believe that the reporting requirements made effective for MEPs by the 2014 interim final rule implementing ERISA §103(g) are a reasonable and appropriate way to implement Congress’s directive in the CSEC Act. The DOL does not believe it has the authority to treat information otherwise required to be filed with or as part of a plan’s annual report as confidential or nonpublic information. 

The Relief 

While EBSA expects full compliance with these reporting obligations on a prospective basis, FAB 2019-01 gives transition relief for MEPs that have failed to file a complete and accurate list of participating employers with their Form 5500 for the 2017 plan year and before. The guidance in the FAB relates solely to civil penalties for Form 5500 reporting obligations; it does not address any other issue under ERISA or any obligations under the Internal Revenue Code.

The DOL acknowledges that it is possible that some plan fiduciaries may have misunderstood the annual reporting requirement, so before it proceeds with further civil penalty enforcement actions it is prepared to provide transition relief to plan administrators of MEPs who voluntarily comply with the ERISA §103(g) reporting requirements and commence filing complete and accurate participating employer information. Specifically, the DOL says it will not reject a Form 5500 or Form 5500-SF filed on behalf of a MEP for the 2017 plan year, or any prior plan year, nor seek to assess civil penalties against the plan administrator regarding such filings, solely on the basis that the plan administrator failed to include complete and accurate participating employer information in accordance with ERISA §103(g). That is,as long as the annual reports filed for the plan for the 2018 and following plan years comply with ERISA §103(g), the Form 5500 or Form 5500-SF and the accompanying instructions.

In light of the July 31, 2019, due date for calendar year plans to file their 2018 Form 5500 or Form 5500-SF, the DOL is granting MEPs a special filing extension of up to 2½ months to file their 2018 annual report in compliance with ERISA §103(g). 

MEPs should check the “special extension” box under Part I, Line D on the 2018 Form 5500/5500-SF and enter “FAB 2019-01” as the description to use this extension. MEPs using this special extension do not need to file a Form 5558 with the IRS. 

Filers may still choose to file the Form 5558 instead to obtain a 2½-month extension for annual reports, but Form 5558 must be filed with the IRS on or before the normal due date (not including any extensions), e.g., by July 31, 2019, for calendar year plans. 

The relief in FAB 2019-01 will be available to MEPs that have already filed their 2018 Form 5500 or Form 5500-SF, as long as they file an amended annual report for the 2018 plan year that complies with the §103(g) reporting requirement by Oct. 15, 2019.