The Field Assistance Bulletin from the Department of Labor (DOL) released in June 2019 discusses transition relief for MEP plans in conjunction with the MEP Final Rules. This temporary relief is for retirement plans that failed to comply with ERISA Form 5500 reporting requirements.
Form 5500 Reporting Requirements
Under ERISA Section 103(g) a MEP must file an annual report (Form 5500) that includes a list of the employers participating in the MEP and a good faith estimate of the percentage of the total contributions made by each participating employer during the plan year. This requirement is effective for plan years starting December 31, 2013.
In 2014, the DOL issued an interim rule that added new requirements to Form 5500 reporting. Upon reviewing 2014 data, the DOL found that many MEPs had failed to complete the list of employers and contribution percentages. In 2019, the DOL commenced enforcement actions in regard to this failure. The National Association of Professional Employer Organizations entered into a discussion with the DOL, arguing that creating this list was an undue burden on MEPs. The DOL, however, has taken the stance that this is from a law enacted by Congress and they do not have the authority to change the law.
Transition Relief
While the DOL is unwilling to change the regulations, they do acknowledge the possibility that plan fiduciaries misunderstood annual reporting requirements. To this end, the DOL has agreed to provide transition relief to MEP administrators, so long as plan fiduciaries voluntarily comply with the ERISA reporting requirements on Form 5500. They must begin filing complete and accurate participating employer and contribution information starting with the 2018 plan year and moving forward.
The practical impact of this transition relief is that the DOL will not reject Form 5500s filed for 2017 and previously or enter into enforcement actions that result in civil penalties solely on the basis of the failure to include the participating employer list along with each employer’s proportionate percentage of total plan contributions. However, this relief is only available if the plan files accurate and complete information in 2018 and going forward.
MEPs have a special filing extension of two and a half months to complete the 2018 Form 5500. You’ll need to check to see whether your plan still has access to this extension.
The benefits attorneys at Hall Benefits Law help our clients stay on top of these rulings and make sure they have the processes and procedures in place to comply with ERISA. To learn more about the services we offer, reach out to our team by calling 678-439-6236, or visit the Hall Benefits Law website.
Per the article I was given “This new reporting requirement became effective for plan years beginning after December 31, 2013.” I see it in IRS instructions for 2013 as well.
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