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6. Properly Identify The Funding And Benefit Arrangements On Line 9 Of The Form 5500 Indicate all proper Funding and Benefit Arrangements on Form 5500, Lines 9a and 9b. The “Funding Arrangement” is method used for receipt, holding, investment, and transmittal of plan assets prior to time plan actually provides benefits. The “Benefit Arrangement” is method by which plan provides benefits to participants. The responses on Lines 9a and 9b are cross-referenced against information on Schedules H, I, and/or A as appropriate. Be careful to attach appropriate financial or insurance schedule (H, I, A) that corresponds to Benefit and Funding Arrangements you indicate.
7. File All The Required Schedules And Attachments With Your Form 5500 Make sure you are filing all required schedules and attachments with your Form 5500. If you check a box indicating that a schedule is attached, schedule must be submitted with your Form 5500.
8. Schedule R And Distributions You must prepare Schedule R only if there are any distributions or rollovers from plan. You must enter both EIN of distribution payer and EIN of pension plan. Part 3 is only for money purchase plans that have made single sum distributions.
9. File The Appropriate Financial Information Schedule (H or I) With Your Form 5500. Make sure you file proper Financial Information Schedule with your Form 5500. The Schedule H is for “large plan” filers (generally plans with 100 or more participants at beginning of plan year). The Schedule I is for “small plan” filers (generally plans with fewer than 100 participants at beginning of plan year).
10. Complete Participant Benefit Information on Schedule SSA Make sure that you list all of terminated participants with their vested balances from prior year that still have not been paid. Starting with 2004 filing year, sponsors are required to list participants, previously outstanding, who have been subsequently paid.
When your client calls, anxious of a possible Dept of Labor fine, you can build long term credibility by taking charge of seeing correction is made by preparer. Better still, review or have an expert review, Form 5500 before client sends forms into Dept of Labor and save your client receiving any letter at all. Calendar year plans Form 5500 EZ and Form 5500 with related schedules are due by July 31, each year.
About the Author: Lawrence Groves is the Small Business Retirement Services Director for The Retirement Group. He has helped thousands of small businesses set up retirement plans. Visit the site for more information http://www.solo-k.com