Pension & Benefits News 2020 Form 5500 annual return/report series issued
Tuesday, January 5, 2021

2020 Form 5500 annual return/report series issued

By Pension and Benefits Editorial Staff

The Employee Benefits Security Administration (EBSA), the IRS, and the Pension Benefit Guaranty Corporation (PBGC) have issued advance informational copies of the 2020 Form 5500 annual return/report, related instructions and schedules, and 2020 Form 5500-SF and instructions. In addition, the IRS has released Form 5500-EZ, which now also appears on the EBSA website.

The advance copies cannot be used to file a 2020 form. Plans should file the forms electronically using the EFAST2 system.

Electronic filing of Form 5500-EZ. A big change this year is the filing of Form 5500-EZ electronically. The Form 5500 and Form 5500-SF instructions have been revised to reflect that the Form 5500-SF can no longer be used by a one-participant plan or a foreign plan instead of filing of the Form 5500-EZ with the IRS. Effective for plan years beginning after 2019, one-participant plans and foreign plans can file the Form 5500-EZ electronically using the EFAST2 filing system.

For more information on electronic filing requirements for the Form 5500-EZ, the Agencies advise consulting IRS Reg. Sec. 301.6058-2. Also, assistance in completing Form 5500-EZ is available at or by calling 1-877-829-5500.

Accountant’s opinion. The Agencies have revised the instructions for Schedule H, Part III, to conform to the new Statement on Auditing Standards 136, “Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA.” The Auditing Standards Board issued the new auditing standard to improve the Accountant’s Opinion, which addresses the auditor’s responsibility to form an opinion on the financial statements of employee benefit plans subject to ERISA. The Statement on Auditing Standards applies to audits of single employer, multiple employer, and multiemployer plans subject to ERISA.

The instructions for the questions on line 3a regarding the accountant’s opinion have been revised. Line 3b and its instructions have been updated to permit filers to indicate more accurately whether there have been any permissible limitations on the scope of the audit pursuant to the EBSA’s regulations. Specifically, in Line 3b, a “yes”/”no” question is now replaced with the appropriate check boxes to indicate whether the ERISA Sec. 103(a)(3)(C) audit supporting the Accountant’s Opinion was performed pursuant to ERISA Reg. Sec. 2520.103-8 or ERISA Reg. Sec. 2520.103-12, pursuant to both, or not performed pursuant to either of those sections.

Required minimum distribution age. The instructions for Schedule H, Line 4l, and Form 5500-SF, Line 10f, have been revised to increase the required minimum distribution age from 70½ to 72 to reflect the relevant amendment to the Code in the Setting Every Community Up for Retirement Enhancement (SECURE) Act.

PBGC coverage. Line 5c in Schedules H and I has been revised to make it clear that if the plan was covered by the PBGC at any time during the plan year, filers should check the “Yes” box.

Schedule R. Line 14 has been revised to provide multiemployer plans with a choice of three counting methods to count inactive participants and to require that an attachment be provided depending on the counting method chosen. A plan that reports a number on lines 14b or 14c that differs from the corresponding number it reported for the plan year immediately preceding the current plan year also must attach an explanation of the reason for the difference. Plans may no longer leave lines 14a, 14b, and 14c blank.

Administrative penalties. The instructions for 2020 Forms 5500 and 5500-SF have been updated to reflect an increase in the maximum civil penalty amount assessable under ERISA Sec. 502(c)(2), as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (P.L. 114-74). The maximum penalty was increased to $ 2,233 a day for a plan administrator who fails or refuses to file a complete or accurate Form 5500 report. The increased penalty under ERISA Sec. 502(c)(2)) is applicable for civil penalties assessed after January 15, 2020, whose associated violation(s) occurred after November 2, 2015 - the date of enactment of the Act.

The instructions note that filers should check for any further inflation adjustments because the penalty amounts are adjusted after the Forms 5500 and instructions are issued.

Source: EBSA News Release No. 20-2139-NAT.

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