FORM 5500 EXPLAINED: Qs & As FOR 2009 FILERS James R. Griffin Jackson Walker L.L.P. 214.953.5827 jgriffin@jw.com

What is Form 5500? The Form 5500 annual return/report is used to report information concerning employee benefit plans to: IRS DOL

Who is entitled to see the Form 5500? Internal Revenue Service Department of Labor Pension Benefit Guaranty Corporation Plan participants Beginning with 2008 5500s, certain defined benefit plan actuarial information must be posted on the plan sponsor’s intranet website. Public www.freeerisa.com

What is a Summary Annual Report and when is it due? A document that must be distributed to all participants in an employee benefit plan at the end of the plan year The summary annual report contains financial and related information about the plan Due within 2 months after the original or extended Form 5500 filing deadline

Where can I get information about Form 5500? EFAST Help Line 1-866-463-3278 Monday through Friday 8:00AM to 8PM, Eastern Time

What websites are available about Form 5500? www.efast.dol.gov View forms and related instructions Get information about approved software vendors Answers to Frequently Answered Questions www.irs.gov View forms, instructions and publications Sign up to receive retirement plan newsletters via email

What employee benefit plans must have a Form 5500? Every pension benefit plan Every welfare benefit plan

How many plans can be included within each Form 5500? One Form 5500 is generally required for each plan

Can several benefit arrangements be included within one plan for Form 5500 filing purposes? Plan sponsors can offer benefits through various structures and combinations Governing documents and actual operations must be reviewed to determine whether welfare benefits are being provided under a single plan or separate plans Having separate insurance policies for each different welfare benefit does not necessarily mean that the employer has separate plans

What is a wrap plan? A document that incorporates various benefits and insurance policies into one comprehensive plan

What is a plan number and how is it assigned? Plan numbers are self-assigned by the employer For pension benefit plans, start at 001 for the first plan and then consecutively number other plans as 002, 003, etc. For welfare benefit plans, start at 501 for the first plan and then consecutively number other plans as 502, 503, etc. Once you use a plan number for a plan, continue to use it for that plan on all future filings with IRS, DOL and PBGC Do not re-use a plan number even if the plan is terminated.

What is the Form 5500 filing status of a plan that covers employees of a parent corporation and its subsidiaries? Multiemployer Plan—No Multiple-Employer Plan—No Single-Employer Plan--Yes

What are pension benefit plans? Profit sharing, stock bonus, money purchase and 401(k) plans 403(b) plans Defined benefit plans Cash balance plans

Are any pension benefit plans excluded from filing Form 5500? Governmental plans Church plans SIMPLE plans funded with SIMPLE IRAs SEP Top hat plans that benefit a select group of management or highly compensated employees but only if a registration statement is timely filed with DOL

What is Form 5500-EZ? Filing for one-participant plans that cover owners only and their spouses Not required if plan had total assets of $250,000 or less on or after January 1, 2007

What are welfare benefit plans? Medical Dental Life insurance Apprenticeship and training Scholarship funds Severance pay Disability

Are any welfare benefit plans excluded from filing Form 5500? Welfare benefit plans that covered fewer than 100 participants as of the beginning of the plan year and are: Unfunded Fully insured A combination of insured and unfunded Governmental plans Church plans

What is the 80/120 rule? If the number of participants that is reported on Line 6 of Form 5500 is between 80 and 120, and a Form 5500 was filed for the prior plan year, the employer may elect to complete the Form 5500 in the same category (“large plan” or “small plan”) as was filed for the prior year Form 5500.

When does an employee become a participant? For welfare benefit plan purposes, an employee becomes a participant on the earlier of: The date specified in the plan document The date the individual becomes eligible for a benefit, subject only to the occurrence of a contingency for which the benefit is provided The date the individual makes a contribution to the plan, whether voluntary or mandatory

What is an unfunded plan? Benefits are paid as needed directly from the general assets of the employer that sponsors the plan Plans that are not “unfunded”: Plans that receive employee contributions Plans that use a trust to hold plan assets Plans are are “unfunded”: Plans with employee contributions that are associated with a cafeteria plan Plans with COBRA premiums

When is the Form 5500 due? All required forms, schedules, statements and attachments must be filed by the last day of the 7th calendar month after the end of the plan year that began in 2008 July 31, 2009 for calendar year plans Next business day if the filing deadline is on a Saturday, Sunday or Federal holiday

What is the plan year? 12 month period Set out in plan document or SPD Policy year Calendar year

Can the due date of Form 5500 be extended? File Form 5558 before the Form 5500 filing deadline to obtain an extension of up to 2 ½ months October 15, 2009 www.irs.gov Filing address: Department of the Treasury Internal Revenue Service Center Ogden UT 84201-0027

Are other extensions possible? An automatic extension of the Form 5500 filing deadline will be granted until the due date of the employer’s Federal income tax return if: The plan year and the employer’s tax year are the same The employer has been granted an extension of time to file its Federal income tax return A copy of the application for extension of the time to file the Federal income tax return is attached to the Form 5500 September 15, 2009

Are there any more extensions? Special extensions under certain circumstances Presidentially-declared disaster areas

What penalties apply if a Form 5500 is filed late? $1,100 a day for each day that a plan administrator fails or refuses to file a complete Form 5500 $25 a day (up to $15,000) for not filing returns required to be filed with IRS Willful violation of ERISA—fine of not more than $100,000 or not more than 10 years in prison or both Making any false statement or representation of fact, knowing it to be false, or for knowingly concealing or not disclosing any fact required by ERISA—fine of not more than $10,000 or 5 years prison or both

Is there any way to reduce the penalties? Delinquent Filer Voluntary Compliance Program http://www.dol.gov/ebsa/FAQs/faq_DFVC.html

Can I print out a blank Form 5500 from the internet for my filing? No Computer generated forms can only be completed via computer Hand print forms may be obtained from IRS 1-800-829-3676 Copies of hand print forms are not acceptable All filings for the 2009 plan year must be made electronically

How can a Form 5500 filing be amended? Submit a completed, signed and dated Form 5500 Attach schedules or attachments that are being changed Do not attach schedules or attachments that are NOT being changed

Who must sign a Form 5500? Plan administrator must sign and date a Form 5500 filed for a pension or welfare plan Either the plan administrator or the employer may sign and date a Form 5500 filed for a pension plan.

What other penalties apply to Form 5500? Under penalties of perjury and other penalties set forth in the instructions, I declare that I have examined this return/report, including accompanying schedules, statements and attachments, as well as the electronic version of this return/report if it is being filed electronically, and to the best of my knowledge and belief, it is true, correct and complete.

Who is the Plan Administrator? The person specifically so designated by the terms of the instrument under which the plan is operated If an administrator is not so designated, the plan sponsor In the case of a plan for which an administrator is not designated and a plan sponsor cannot be identified, such other person as the Secretary may by regulation prescribe.

How long should I keep previously filed Form 5500s? All plan-related materials should be kept for a period of at least six years after the date of filing of an ERISA-related return or report, and the materials should be preserved in a manner and format (electronic or otherwise) that permits ready retrieval All records that support the plan’s annual reporting and disclosure should be retained for the same period of at least six years

What are the common filing mistakes? Failure to sign and date the Form 5500 and related schedules Math errors Incorrect business activity code Failure to use approved software or the official handprint forms Failure to use proper EIN and plan number Failure to use proper plan characteristic codes

FORM 5500 EXPLAINED: Qs & As FOR 2009 FILERS James R. Griffin Jackson Walker L.L.P. 214.953.5827 jgriffin@jw.com