In our continuing series of FAQs on EFAST2, we are addressing the issues and procedures with which 5500 preparers and plan sponsors will need to familiarize themselves to make the transition to electronic filing. In this technical update, we revisit the issue of filing signer credentials from our discussion in the Getting Ready for EFAST2: Part 2. The issue continues to provoke discussion among 5500 preparers because of their concerns regarding the employer’s ability to navigate the process for obtaining filing signer credentials.
To eliminate any doubt as to its position regarding sharing filing signer credentials, the Department of Labor (DOL) added a new FAQ to the series of EFAST2 FAQs it issued in late August, see
DOL FAQs on EFAST2. The new FAQ followed closely on the heels of instructions the DOL provided to third party software developers in which they reminded software developers of their obligation to protect the integrity and privacy of the electronic signatures. The new FAQ reads as follows:
Q33: I am a Plan Administrator that needs to electronically sign a Form 5500. Can I tell my preparer what my PIN is so they can sign and submit it for me?
As the Plan Administrator, the Form 5500 or 5500-SF that will be sent to EFAST2 must be examined by you before it is submitted. Your signature attests that has been done and that, to the best of your knowledge and belief, it is true, correct, and complete. Since the EFAST2 PIN is the plan administrator/sponsor/DFE's electronic signature for purposes of the Form 5500 and Form 5500-SF, PINs must be protected and not shared. We appreciate the fact that some filers may find it easier to comply with the electronic signature requirement if PIN sharing were permitted. However, we believe plan administrators and other filers will be able to comply with their annual reporting obligations within the EFAST2 system PIN requirements even if some filers will need to adjust their practices to address individual challenges.
The FAQ represents the DOL’s formal response to the software developers who had requested the DOL to relax its standards and allow preparers to sign for their clients after receiving written authorization from the clients. We have prepared the following FAQs to address issues relating to filing signer credentials.
How will an authorized signer of the Form 5500 electronically sign a Form 5500?
The signer will obtain filing signer credentials from the DOL and will enter the credentials on an electronically prepared Form 5500. After the filing signer has entered his/her credentials, the Form 5500 will be transmitted to the DOL over the internet.
May a third party administrator (TPA) obtain filing signer credentials on behalf of his/her clients?
No.
May the company sponsoring the plan obtain credentials that any officer may use to electronically sign the Form 5500?
No. Each individual must obtain his/her own credentials. The DOL requires each individual who signs a Form 5500 to obtain his/her own credentials. The credentials are personal and the DOL does not permit sharing of credentials.
If an individual does not have access to a computer, how does the individual obtain filing signer credentials?
The DOL recommends that the individual use the public library. Alternatively, the individual could access a computer at the TPA’s office, or the TPA could bring a laptop computer to the individual’s place of business.
To obtain filing signer credentials, will the individual need to obtain an email address?
Yes. The individual will need to obtain an email address (e.g., gmail, hotmail, etc.) to obtain filing signer credentials. The DOL will use the email address to provide a confirmation of the registration process and a link from which the individual will obtain the filing signer credentials. Electronic invitations to sign Forms 5500 also will come to this address.
How will an individual obtain the filing signer credentials?
The individual will go to a DOL website and enter certain personal information. The DOL then will send an email confirming the registration and provide a link from which the individual will obtain a User ID and pin code (filing signer credentials).
Will the individual enter into any agreements with the DOL regarding the filing signer credentials?
Yes. The individual obtaining filing signer credentials will enter into a PIN agreement in which he/she will agree not to share the credentials with anyone, including a commercial service provider (e.g., TPA). The filing signer also will enter into a signature agreement under which the individual acknowledges that the electronic signature has the same legal force as a handwritten signature.
If a plan sponsor has a TPA prepare its Form 5500, how does the filing signer enter the filing signer credentials without sharing the credentials?
A plan sponsor that has a TPA prepare the Form 5500 on its behalf generally has two options for entering the filing signer credentials: (1) the TPA uses a web-based solution (e.g., SunGard Web Client or the “no frills" DOL IFILE program) through which the filing signer can view the Form 5500 and enter his/her filing signer credentials; or (2) the filing visits the TPA’s office and reviews the Form 5500 and enters his/her filing signer credentials. Note: In most circumstances, time or distance will prevent a filing signer from visiting the TPA’s office.
What are the consequences if a filing signer shares his/her credentials with a TPA who enters the filing signer credentials for the filing signer?
The DOL has not indicated what consequences will apply to a filing signer that shares his/her credentials with a TPA. However, the likely consequence would be that the DOL would simply reject the filing as incomplete and assess later filing penalties. At a recent ASPPA conference, a DOL representative said that the DOL would likely not prosecute those who share credentials. However, that is not the same as saying that the DOL will accept invalidly signed returns (according to its standards) or that a TPA should encourage its clients to violate the PIN agreement.
May a filing signer use a Form 2848 (power of attorney) to authorize a TPA to sign a Form 5500 on his/her behalf?
No. The Form 2848 does not provide authority to sign a Form 5500 on paper (for 2008) or electronically (for 2009).
Will a TPA need to obtain credentials to prepare a Form 5500?
If a TPA uses third party software to prepare and transmit a Form 5500, it will not need to obtain credentials to prepare the Form 5500. However, if the TPA uses IFILE to prepare or transmit Form 5500, the TPA will need to obtain filing author credentials.
Will a filing signer need credentials to sign new Form 5500-SF?
Yes. Form 5500-SF is filed electronically following the same procedures as Form 5500.
Will a filing signer need credentials to sign Form 5500-EZ?
No. Employers will file Form 5500-EZ on paper with the IRS.
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SunGard's Relius Education EFAST2 Workshop. Would you like a concise letter explaining to employers the steps in obtaining filing signers credentials? Would you like an EFAST2 checklist explaining each of the steps required for electronic filing? In addition to the seminar, attendees will receive two important tools: an EFAST2 checklist and a concise letter instructing employers how to obtain required credentials. 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 Relius 5500 Web Client, our EFAST2 solution, visit: Relius 5500 Web Client.
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