Change for Tax form reporting for 2009 Plan Years!

By Alison Murray

Medical Groups and Law Firms often have a retirement plan configuration where individual PC doctors or attorneys are in their own Defined Contribution plans, with the staff in a separate plan. The entire arrangement is considered a Controlled Group. All plans are combined for various compliance tests. Until 2009, the individual PC’s, as plans of a controlled group, could not file a short IRS Form 5500-EZ. The individual PC’s were also required to have a bond.

The definition of a “one-participant plan” has changed for purposes of filing 5500’s for 2009 plan years. Even if you are part of a controlled group, if your personal PC-owned plan contains only you, or you and your spouse, you can file a Form 5500-EZ. In addition you are no longer required to have a bond covering the assets of the trust.

If your plan assets are $250,000 or less you don’t have to file anything! The only requirement is that if you terminate your plan you must file a form in the final year.

What does this mean for you?

5500-EZ’s must still be filed in paper form. They can not be filed electronically. It’s one less thing for you to have to learn this year and you can concentrate on doing what you do best.

The cost of 5500-EZ preparation is less than the cost to prepare a regular Form 5500 so you’ll save some money!

5500-EZ’s are not uploaded to public information. You have more privacy.

Larger plans consisting of partners or partners and spouses only will also enjoy this newly-minted definition of “One Participant Plan”. Take advantage of it.

Remember, you heard it here first!!

News Flash: IRS Forms Must be Electronically Filed!

For plan years beginning in 2009, the form 5500’s must be filed electronically with the DOL

Paper forms will no longer be accepted by the DOL unless you are eligible to file a 5500EZ (only for those plans that are maintained by sole proprietors or partnerships, that are not part of an affiliated service group or controlled group and that do not have rank and file employees are eligible ).

This rule applies even if you don't own a computer! The IRS has recommended that if you do not have access to a computer, you use your local library, internet café or come into our offices.

The Plan Sponsor will be required to obtain a user name and PIN from the DOL (credentials) in order to submit the form 5500 electronically to the DOL.

There is a brewing controversy over the DOL’s refusal to allow the Plan Sponsor to share their credentials with third party administrators for purposes of filing the 5500.

Please see the content of an email below from ASPPA (American Society of Pension Professionals & Actuaries) that includes a Petition to Phyllis Borzi, Assistant Secretary/EBSA US Department of Labor. You may want to sign and electronically file this Petition.

Regardless of the outcome on the sharing of the credentials, ACI will be setting up a webinar on our website that you can review at your convenience on how to file electronically and how to set up your DOL signing information. We anticipate this webinar will be available in the next few weeks.

We recognize that you will be going through a learning curve on this new requirement. We are committed to helping you through this change. Your ACI administrator will be co-coordinating with you in setting up the plan administrator, plan sponsor and CPA if applicable for the electronic filing.

The following is an email from the American Society of Pension Professionals & Actuaries (ASPPA) regarding the EFAST2 filing.

Sign the EFAST2 Petition!

ASPPA is soliciting your support in asking the Department of Labor to modify its position with regard to the sharing of EFAST2 credentials. Many practitioners have expressed concern that DOL’s current position will hamper their efforts to assist clients with timely filing of Form 5500. IRS and PBGC have developed systems that recognize the key role played by service providers in achieving compliance. ASPPA proposes that DOL implement similar rules so that filing signers could, at their option, choose to share their credentials with their service providers to facilitate electronic filing.

Read the entire letter here.

If your firm wishes to endorse our efforts, please click here and you can provide the necessary information to have your firm’s name added to the list of signatories on the above letter. Be sure you are authorized to sign on your firm’s behalf and only one member of your firm completes the form.

You do not have to be a member of ASPPA to support this effort. ASPPA believes there is strength in numbers and hopes you will take this opportunity to let DOL know your firm is committed to compliance.

Thank you for your support.

4245 North Fairfax Drive Suite 750 Arlington, VA 22203 703.516.9300 www.asppa.org