In our continuing series of FAQs on EFAST2, we are addressing the issues and procedures with which the 5500 preparers and plan sponsors will need to familiarize themselves to make the transition to electronic filing.
Many 5500 preparers expect the transition to mandatory electronic filing to be difficult. The primary reason for this concern is that clients (plan sponsors) will need to obtain and enter filing signer credentials electronically. Some 5500 preparers also are considering preparing the Form 5500 (in this article, references to Form 5500 include the schedules and attachments) on their desktop software and then sending it to their client to file using the DOL’s IFILE system. In this article, we address the issues that a 5500 preparer will need to consider in determining whether having the client file under IFILE is a feasible option.
This article is focusing on the option of preparing the Form 5500 using third party desktop software and then sending it to the client to file under IFILE.
May a 5500 preparer complete the Form 5500 on its desktop software and then provide it to the client for the client to file on IFILE?
Yes.
After preparing the Form 5500 on desktop software, how would the 5500 preparer provide the Form 5500 to the client for filing with the DOL under IFILE?
The 5500 preparer effectively has two options: (1) download the Form 5500 to an XML file (which is the file format required under IFILE) and email it to the client; or (2) save it to a PDF file and email it to the client. Comment: In this article, we primarily address the issues relating to the XML approach.
If a client files a Form 5500 using IFILE, will the client need to obtain additional credentials beyond filing signer credentials?
Yes. The client will need to obtain filing author credentials in addition to filing signing credentials.
If the client files under IFILE, who will receive the email regarding the filing status?
The client will receive the filing status email.
If the client receives an email indicating
filing error, filing stopped or filing received with warning , who will be responsible for amending the return or correcting a late filing?
The client will be responsible for amendments and correcting late filings.
What steps will the 5500 preparer and the client need to complete in order for the client to file under IFILE with an XML file?
This table compares sending an XML file to the client for the client to file via IFILE with using a private web-based system.
Steps: 5500 preparer completes the Form 5500 on desktop software and then:
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IFILE/client
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Comment
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Private web-based system
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Comment
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|
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Preparer will need to export forms to an XML file
|
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N/A
|
|
|
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Preparer will need to export attachments to an IFILE acceptable format
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Some private software will be able to include the attachments with the XML forms
file
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N/A
|
|
|
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Preparer will need to attach and email the XML files
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Preparer may encounter issues with email security warnings and file size limitations
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N/A
|
|
|
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Client obtains filing author and filing signer credentials
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Client can obtain both credentials at the same time
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Client obtains filing signer credentials
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No filing author credential needed under private web based system
|
|
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Create a filing under IFILE
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Preparer will need to instruct client how to use IFILE
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N/A
|
|
|
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Client will need to download XML files from email
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N/A
|
|
|
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Client locates Form 5500 (and schedules) XML file and imports to IFILE
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Will client be able to accomplish this without help?
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N/A
|
|
|
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Client locates each attachment PDF file separately and imports it to proper place
within IFILE
|
Some private software will be able to include attachment w/ the XML for the appropriate
form (51 potential attachments)
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N/A
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Preparer will add attachments to the filing
|
|
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Client scans audit into PDF (if audit required)
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Does client have a scanner? Accountant or preparer might provide audit in
PDF format
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N/A
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Preparer will attach audit
|
|
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Client invites itself to signing ceremony
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If the same person signs as plan administrator and plan sponsor, only one ceremony
is necessary.
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Preparer will invite client to signing ceremony (once) by way of email
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With SunGard’s Relius 5500 Web Client, this step is automatic
|
|
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Client will need to electronically sign the 5500 (i.e., enter credentials)
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Client will need to electronically sign the 5500 (i.e., enter credentials)
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Relius 5500 Web Client provides the option to store the credentials to use in following
years
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Client transmits to DOL
|
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Preparer or client may transmit
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|
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Client determines whether filing is processable
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Will client wait the 90 seconds for the determination?
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System will notify the preparer whether filing is processable
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Some systems will have option of also notifying the client
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If not processable, client will need to correct the error and retransmit
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Will client know how to correct?
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If not processable, the preparer will correct and retransmit
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IFILE will email client (Filing Author) w/ status:
•Filing stopped
•Filing error
•Filing received
•Filing received
w/ warning
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Will client understand what they are supposed to do?
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System will notify preparer of status
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Relius 5500 Web Client also has the option of notifying the client
|
|
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If client receives status of filing error, filing stopped or filing received w/
warning, client will need to amend, sign and re-file
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If client receives filing w/ warning, client may not need to amend but it will need
to take some action (e.g., file under DFVC)
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If filing receives status of filing error, filing stopped or filing received w/
warning, preparer will amend, have client re-sign and re-file
|
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If a 5500 preparer completes the Form 5500 on its desktop software, saves it in a PDF format, and then emails the file to its client, may the client upload the PDF file to IFILE?
No. The client would need to key in the entries from the Form 5500 into IFILE. Comment: 5500 preparers taking this approach should note that after inputting the information on IFILE, the client would not have the benefit of the edit and validation checks of the desktop software application.
Conclusion: 5500 preparers who are considering having their clients use IFILE to file the Form 5500 should consider whether their clients are capable of navigating the process and whether they will spend the time and money they save in helping them. Many 5500 preparers are already concerned that many of their clients will have difficulty understanding the procedures for obtaining and entering filing signer credentials. The process of using IFILE promises to be even more challenging.
EFAST2 Workshop .
EFAST2 will no doubt be the most significant reporting change that has affected retirement and welfare plans during the past decade. Our Workshop will prepare you to make the transition to mandatory electronic filing. We also have scheduled two other seminars to follow the EFAST2 Workshop – Plan Forms, Notices and Amendments
and the ERISA Workshop .
For more information on our EFAST2 solution: Relius 5500 Web Client.
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