SunGard Relius

Beginning with the 2009 plan year, the Department of Labor (DOL) will require retirement and welfare plans to file their annual reports (Form 5500) electronically (EFAST2). The transformation from paper filing to electronic filing will result in significant changes in procedures. To ease the transition, preparers need to familiarize themselves with the new electronic filing system. The following FAQs address how the DOL will implement EFAST2. In subsequent weeks, we will address additional EFAST2 issues.

How will a plan sponsor file electronically?

Plan sponsors have three options for entering data on the Form 5500 (and Schedules) and filing it electronically:

1. a private web-based system (e.g., Relius Web Client)
2. a third party software application, which then transmits it to the DOL via the Internet; or
3. the DOL’s web-based system (IFILE).

The private web-based system provides the most user-friendly and efficient arrangement for administrators and financial institutions completing numerous 5500s. A large employer completing its own 5500s in-house may use third party software to complete and transmit its 5500s to the DOL. A third party administrator (TPA) or financial institution completing 5500s on behalf of plan sponsors can use third party software to complete the 5500s but would need to upload the 5500s on to IFILE in order to facilitate the electronic signature and transmittal to the DOL. The DOL has designed IFILE for practitioners who complete 2-3 5500s. The DOL has not designed the system to accommodate preparers who complete a large volume of 5500s.

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 commence filing electronically on January 1, 2010. Any plan which has a 5500 due before January 1, 2010 will have an automatic extension until 90 days following the date on which the Form 5500 is available for filing electronically. That date would be March 31, 2010, unless the DOL changes the date on which electronic filing will be available.

Must all retirement plans file electronically?

With the exception of a plan covering the sole owner (and his/her spouse) or partners in a partnership (and their spouses) and no employees (“owner only plan"), all plans, including retirement, welfare and 403(b) plans, will need to file their 5500s electronically. Owner only plans will file a paper copy of the 5500-EZ with the IRS. However, owner only plans which do not hold employer stock may elect to file a Form 5500-SF (short form) electronically with the DOL.

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 or financial institution obtain signer credentials on behalf of its clients?

No. Every individual who signs a 5500 or schedule must obtain his/her own signature. Furthermore, the government limits one set of credentials per email address. When an individual obtains his/her signer credentials, the individual must certify to the government that he/she will not share the credentials with anyone, including a TPA or financial institution.

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 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.

5500 Workshop/401(k) Workshop. In our upcoming 5500 workshop, not only will we address all of the important questions and issues in the 5500, 5500-EZ, and schedules, we also will explain how to use and prepare effectively for EFAST2. We also have scheduled our 401(k) Plan Workshop to follow the 5500 Workshop. The topics for the 401(k) Workshop include the Suspension of the Required Minimum Distribution;, PPA ’06 Technical Corrections; New Guidance of Permissive Disaggregation; Safe Harbor 401(k) Plan Design; Participants in Financial Difficulties: loan defaults, hardship distribution and QDROs; and Complex Testing of Ordinary Allocations; and Penalties and Additional Income Taxes. . Register Now.

The 5500 Filing Guide is a comprehensive guide to completing the 5500 (and schedules) effectively and efficiently. The recently updated book not only includes practical explanations of each line on all the forms and schedules, but it also provides hundreds of examples and FAQs. Get more information here.

Question and Answer Pamphlet on EFAST2. To help 5500 preparers explain the changes made by EFAST2, SunGard has prepared a Q&A pamphlet to answer the employers’ questions. Order Now.