Provided by your plan administration partner:
Follow-up to our July email announcement regarding Electronic Filing of Form 5500
Question and Answer Format
How will a plan sponsor with an Innovative Pension Services Contract file electronically?
Innovative Pension expects to use a private web based system
When is the mandatory electronic filing system (EFAST2) effective?
The EFAST 2 is effective for plan years beginning on or after January 1, 2009. Plans will be able to begin filing electronically on January 1, 2010.
Are any plans exempt from an electronic filing?
5500-EZ filers are NOT required to file electronically (EZ's are filed by Plans with no common law employees other than the owner (partner owners) and their spouses.)
How does a plan sponsor obtain electronic signature credentials?
The plan sponsor will go to a DOL website (IREG) and enter certain personal information. The plan sponsor then will receive an email with a link to a website where you will receive the credentials (signer ID and PIN code). The credentials are personal to the individual obtaining the credentials. If a plan sponsor may have different company officers signing the 5500, each officer would need to obtain his/her own credentials.
May a TPA obtain signer credentials on behalf of its clients?
No. Every individual who signs a 5500 or schedule must obtain his/her own signature and the limit is one set of credentials per email address. When an individual obtains signer credentials, the individual must certify to the government that he/she will not share the credentials with anyone, including a TPA.
How do I use the electronic signature credentials in filing a Form 5500 electronically?
If the plan sponsor is completing its own filing, the plan sponsor will enter the electronic signature (signer ID and the PIN code) in the appropriate place on the 5500. Under a web-based system, the preparer (Innovative Pension) will invite the plan sponsor to an electronic signing ceremony where an authorized representative (e.g., officer) of the plan sponsor will enter his/her credentials.
EFAST2 Credentials
The DOL is addressing the issues and procedures with which 5500 preparers and plan sponsors will need to familiarize themselves to make the transition to electronic filing. After selecting the method a preparer will use to enter the data on the forms, the next step will be obtaining the proper electronic credentials. The following FAQs address the types of credentials required, how to obtain the credentials, and restrictions on sharing the credentials.
May a preparer or plan sponsor use the same email address to obtain credentials for more than one person?
No. The DOL limits one set of credentials to an email address. An individual may obtain more than one credential (filing signer, filing author, schedule author, or transmitter). However, more than one individual may not use the same email address to obtain credentials.
Under IFILE, will a preparer be able to invite the plan sponsor official who will sign the Form 5500 to the electronic signing ceremony if the official does not have signer credentials?
No. Apparently, IFILE will block the preparer from sharing the filing with the signer. The preparer would then need to contact the signer and encourage him/her to obtain the signer credentials. The same obstacle would apply to a preparer using third-party software that uploads the data to IFILE. This obstacle, however, would not apply to a preparer using a third-party web-based system. Under a third-party web-based system, the preparer could invite the company official to the signing ceremony and if the company official does not have credentials, the same email could provide instructions for obtaining the credentials and a link to IREG.
If an employer obtained filing signer credentials under EFAST, may the employer use those credentials under EFAST2?
No. The employer must obtain new filing signer credentials for EFAST2.
When will IREG website be available?
January 1, 2010.
Will a plan sponsor electronically file attachments and plan audits (attachments)?
Yes. If a Form 5500 filing (or schedule) requires attachments, the preparer must file the attachments electronically. Under EFAST2, the DOL only accepts two electronic formats: (1) portable document format (PDF), or (2) plain text files, sometimes referred as ASCII files or text files.
Under EFAST2, how many potential attachments are includible?
Potentially, there are 51 separate attachments to a Form 5500 filing. The attachments include the Schedule of Assets Held, Schedule of Reportable Transactions, various actuarial schedules attached to the Schedules SB, MB and R, and the Accountant's Opinion.
Under EFAST2, what requirements apply to the accountant's opinion?
Under EFAST2, the accountant's opinion must be on the accounting firm's letterhead with the firm's name, address and phone number. The opinion must also include a "wet" signature of the accountant. A wet signature is an actual signature which the accountant creates by hand using a pen on the opinion. Accordingly, the accountant will scan the opinion into PDF format. The accountant may not use text files for the opinion. Unless the plan is exempt from the accountant's opinion requirement, the preparer may NOT file the Form 5500 without the accountant's opinion. If a preparer attempts to file without the opinion, the DOL will not accept the filing. Note: in the past, if the opinion was not ready by the extended deadline for filing the Form 5500, preparers would file the Form 5500 without the opinion to avoid the late filing penalties and then later, when the accountant completed the opinion, amend the filing to include the opinion. Although the DOL never officially recognized this technique, it never objected to it. Generally, by the time the DOL scanned the filing, the opinion was included. Accordingly, the preparer needs to warn the accountant that this technique will not be available under EFAST2.
How will the DOL prevent a preparer from filing a Form 5500 without the accountant's opinion?
EFAST2 will have a "node" in the electronic filing structure that must include the opinion. If the filing does not contain the opinion in the node, the system will not accept the filing. Note: under EFAST2, the DOL will be aware that a filing is late immediately following the deadline. Accordingly, the DOL (or IRS) can send out letters assessing penalties immediately.
Will the Schedule B require a "wet" signature on the part of the actuary?
Yes. Therefore, the actuary will need to prepare the schedule, print it, and include the wet signature. The actuary then will need to scan the schedule into PDF format (again, no text file format) to be attached to the filing. The actuary also will need to provide the schedule in electronic format to be included with the filing. Accordingly, the filing will include both an electronic and PDF version of the schedule. Note: the reason for the wet signature is that the Board of Actuaries determined that the schedule needed a wet signature.
Reach Customer Service at 858-748-6500 with questions
Plan Design 858-218-3440
Contact Us
In this Announcement:
Electronic Filing of Form 5500
Questions and Answers
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Innovative Pension
14251 Danielson Street
Poway, CA 92064
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Call Customer Service: 1.800.98PENSION
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