The Form 5500 is an ERISA requirement for retirement plans to report and disclose operating procedures. Advisors use this to confirm that plans are managed according to ERISA standards. The form also allows individuals access to information, protecting the rights and benefits of the plan participants and beneficiaries covered under the plan.

Several events can trigger a DOL or IRS audit, such as employee complaints or self-reporting under the annual submission of the Form 5500. Oftentimes an audit is a random event, which is why you should always be prepared.

Under existing law multiple employer plans must be limited to employers that are in some way related, for example employers in the same industry.

The Department of Labor (DOL) recently reported that in reviewing Form 5500 data for 2018 a significant number of multiple employer plans (MEPs), including MEPs sponsored by professional employer organizations (PEOs), failed to include a complete and accurate list of participating employers with their Form 5500/5500-SF.

Hey Joel - What are the risks for late 5500 filings? - Tardy in Tallahassee

The Internal Revenue Service’s (IRS’s) Employee Benefit Audit Program is used to audit and enforce. The IRS’s emphasis, with respect to defined contribution plans is on compliance with the requirements of the Internal Revenue Code (the Code), the plan’s tax qualification and administration of all plan documents. In the event of noncompliance with regulations, the IRS can impose taxes, penalties and interest.