Starting January 2009, all Form 5500s are to be filed electronically using the Department of Labor’s newly implemented program, EFAST2. Here are some tips to remember to ensure that you fill this online form and file Form 5500 smoothly and without facing any hassle:
- Before filing using EFAST2, responsible parties should register at their website. Here they would identify the individual who would be completing the Form 5500 and all signing parties. Early registration is recommended.
- The five roles available upon registration are Filing Author, Filing Signer, Transmitter, Schedule Author, and Third Party Software Developer. It’s important that one understands their roles prior to registration as they cannot change them once the registration is complete.
- The Filing Author is the individual who completes this online form at EFAST2, and those who sign the Form 5500 should register as the Filing Signer.
- Each individual uses their personal credentials and these are not associated to the company. The process of registration assigns each user with a personal identification number and password.
- Either the Filing Author or a third party administrator can complete the Form 5500 online. This third party administrator should be certified to prepare the form and submit it for the company.
- According to the Internal Revenue Code, the plan sponsor, employer, or plan administrator is allowed to sign the filing. However instructions provided with Form 5500 states that forms that are not signed electronically by the plan administrator could be rejected and subjected to civil penalties under Title I of ERISA.
- Social Security information should not be added, as filings entered under the EFAST2 program will be posted on the Department of Labor website. Also if your plan is regarded as a defined benefit plan, certain details from the Form 5500 should be posted on your company’s intranet for employee viewing.
- For those filing extensions, a Form 5558 copy does not need to be attached to the Form 5500. Those who have already submitted a Form 5558 for the plan year would only need to check the right box on Line D. A hard copy of the Form 5558 must be maintained for the plan’s permanent record.
- Schedule SSA and E have been eliminated from the Form 5500. One needs to file the annual registration statement directly with the Internal Revenue Service.
- A hard copy of the Form 5500 must be kept with the permanent records of the plan, with all the necessary signatures.
These tips should help make the new e-filing process smoother for all to use. Remember to register early on the EFAST2 website, http://www.efast.dol.gov, before starting the application process to avoid unnecessary errors. And finally, be sure to read through the instructions and be aware of each person’s role in completing the Form 5500.
On a lighter note, it is funny to note that although this e-filing system was implemented to save paper, one still needs to maintain a paper hard copy.