On July 24, 2019, the Department of Labor (DOL) published Field Assistance Bulletin (FAB) 2019-01 to provide temporary relief to multiple employer plans (MEPs) that failed to include certain required information as part of their Form 5500 filing. 

Background

In 2014, Congress added §103(g) to ERISA, creating a specific Form 5500 annual report requirement for multiple employer plans.  Specifically, §103(g), and the DOL’s supporting regulations, require the MEP to include with its annual Form 5500 filing:

1.    The name and EIN of each participating employer, and

2.    A good faith estimate of the percentage of total contributions made by each participating employer during the plan year.

This new reporting requirement was effective for plan years beginning after December 31, 2013.

The DOL conducted reviews of some large MEP filings and found that over 35% of the reviewed MEPs failed to include the required participating employer information as part of their Form 5500 data.  The DOL specifically noted that some filers included incomplete data, such as client numbers or initials to identify employers, partial EINs, and the statement “details available upon request.”  The DOL treats the MEP return as incomplete if it lacks the required information, or just has partial information. Essentially, this is treated as if the Form 5500 has not been filed.  The penalties for non-filing of the Form 5500 can be as much as $2,194 per day. 

The DOL issued FAB 2019-01 to provide transition relief to MEPs that have failed to file a complete and accurate list of participating employers with their Form 5500 for the 2014 through 2017 plan years.  Note: this issue should not impact filers of “open” MEPs in which each participating sponsor (or related employer group) file a separate Form 5500/5500-SF and the box for “a single-employer plan” is checked in Part I, Line A.

FAB 2019-01

To obtain the transition relief, the MEP must file complete and accurate list of all participating employers, in the required format, for the 2018 and future plan years.  The DOL reserves the right in individual case to request the information the plan did not include in prior years. For plans that satisfy the requirements of the transition relief, the DOL will not reject the Form 5500 (or Form 5500-SF) or seek to assess penalties with regard to those filings solely due to the failure to comply with the §103(g) reporting requirements.  Form 5500/5500-SF filings for 2014-2017 do not have to be amended to take advantage of this relief.

Recognizing that the filing deadline for 2018 calendar year plans is July 31, 2019, the DOL is granting MEPs a special extension of 2½ months (to October 15, 2019 for calendar year plans) to file a Form 5500 that meets the reporting requirements.  To take advantage of the extension, 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.

MEPs using this special extension do not need to file a Form 5558 with the IRS for 2018.  However, it is unclear whether off-calendar year MEPs are being granted the automatic 2½ month extension and off-calendar year MEP filers are advised to file a Form 5558, if an extension is needed.  The automatic extension applies to Form 5500 or Form 5500-SF, and does not apply to Form 8955-SSA.  Plans needing additional time to file From 8955-SSA should file Form 5558 (by July 31 for calendar year plans) to obtain an extension.

MEPs that have already filed a 2018 Form 5500/5500-SF without the required information may file an amended report by October 15, 2018 and still obtain the FAB 2019-01 transition relief.

Conclusion

MEP sponsors and administrators should carefully review their 2014 – 2018 Form 5500/5500-SF filings to determine compliance with the §103(g) filing requirements.  FAB 2019-01 provides a useful opportunity to correct any deficiencies and avoid potentially costly filing penalties.

Note: We will discuss this in more details at the Chicago Advanced Pension Conference, September 4-6, 2019. Early fee is extended until August 2. Register online.

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Chicago Advanced Pension Conference – Early fee extended to August 2
September 4-6, 2019 – Hyatt Centric Chicago Magnificent Mile
ERISA presenters include: Ilene Ferenczy, Craig Hoffman, JJ McKinney, Lauren Okum, David Schultz, and Derrin Watson.
Up to 19 hours of CE credits. Click here for the complete agenda, program details, and online registration. Register by August 2 and save $150.


Registration Open - Live Web Seminars
Click on the links below for more details about these programs and to register online.
Voluntary After-Tax Employee Contributions: What Are These Things? August 5, 12:00 pm EDT
Related Employers: Fundamentals of Controlled Groups, August 19, 12:00 pm EDT
Safe Harbor 401(k) Plans: Back to Basics, August 21, 12:00 pm EDT
Partnerships and LLCs: Understanding the Unique Rules, August 26, 12:00 pm EDT
Distributions Following Death: Deceased Participant Issues, September 16, 12:00 pm EDT
Roth Distributions and Rollovers, September 18, 12:00 pm EDT
The Dirty Dozen 2019: Correcting Common Errors, September 23, 12:00 pm EDT

Registration to Open in July 2019 – Advanced Plan Design and Cross-testing Workshop, Advanced 401(k) Topics Workshop
Presented back-to-back in October/November in Kansas City, Appleton, Charlotte
Attendees can earn up to 7 CE credits for each 1-day workshop. Dates, locations, agendas, and complete details will be available in within the next few days, here (click on Seminars).