Pension & Investments featured Groom principal Allison Itami in their article, “Form 5500 rules will simplify process for plan sponsors, but more changes ahead,” to discuss finalized changes to the Form 5500 process.
“The changes finalized in this round were fairly specific to certain group plans, but the preamble gave a lot of information about where DOL is going for plan sponsors of single employer plans in the future,” said Itami.
Revisions to the “Schedule of Assets Held for Investment” and the “Schedule of Assets Held and Disposed of within the Plan Year” that were proposed in September 2021 were postponed. “It’s not off the table, it’s just something they’re not pushing plans to do at the moment,” Itami said. “Commenters said it’s a big record-keeping lift, so I think that extra time is appreciated.”
Pensions & Investments reported that, “new breakout categories were added to the “Administrative Expenses” lines of Schedule H, including specific lines for audit fees, bank or trust company fees, actuarial fees, legal fees, valuation fees, salaries, trustee fees and expenses.” “That’s really going to shine a really big light on those expenses,” Ms. Itami said. “It could cause more scrutiny of those fees, which could lead to more audits.”
The final changes allow plans to asses their size by counting the number participants with account balances at the start of the plan year instead of counting eligible employees.
“That’s going to be super helpful for plans with employees who have decided not to participate,” Ms. Itami concluded. “Those plans might fall under 100 and then avoid the expense of the audit.”
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