Jim Griffin 214.953.5827 jgriffin@jw.com

1. Form 5500 Electronic Filing—The Only Way to File Tye Andersen512.236.2007tandersen@jw.com Jim Griffin214.953.5827jgriffin@jw.com

2. Overview • Part I: Review of the Basics • Part II: Form 5500 Revisions • Part III: EFAST2

3. PART IReview of the Basics

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

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

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

7. 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

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

9. 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.

10. 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

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

12. 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

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

14. 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

15. 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.

16. 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

17. 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 “unfunded”: • Plans with employee contributions that are associated with a cafeteria plan • Plans with COBRA premiums

18. Schedule A information • If an insurance company refuses to provide information for Schedule A, ER should report the refusal on line 2a of the Schedule A

19. Administrative services only (ASO) contract • An ER should not file a Schedule A for an ASO contract • In a self-insured health plan, ERs often contract with an insurance company to process claims • However, insurance company is acting as a service provider and is not insuring the benefits

20. Stop loss contracts • ERs with self-insured welfare plans may purchase stop loss policies to help them manage the risk • If premiums are paid out of the ER’s general assets, the contracts are not reported on Schedule A

21. Financial Schedules I – Small PlansH – Large Plans

22. 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 2009 • July 31, 2010 for calendar year plans • Next business day if the filing deadline is on a Saturday, Sunday or Federal holiday; August 2, 2010

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

24. 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, 2010 • www.irs.gov

25. 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, 2010

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

27. 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

28. Audit not completed • File 5500 timely • With draft of audit or an explanation of why audit not completed • When completed, file amended 5500 • DOL may assess $50,000 penalty

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

30. 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.

31. 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.

32. Fidelity Bond • Every plan official who handles plan funds must be covered under a fidelity bond • Certain exemption for banks and insurance companies • Fiduciary liability insurance is not reported on line 4e (Sch. H or I)

33. 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

34. PART IIForm 5500 Revisions

35. 2009 Forms Revisions • Facilitate move to fully electronic filing system. • Streamline and simplify small plan filing. • Better disclosure on plan fees & expenses. • Includes Pension Protection Act (PPA) reporting changes first required in 2008.

36. New Form 5500-SF • Two Page “Short Form” 5500 for Small plans (under 100 participants). Can use if: • Exempt from annual audit requirement; • 100% invested in secure investments that have a readily determinable fair value; • Hold no employer securities; and • Not multiemployer plan. • No Schedules required except DB plans required to file actuarial schedule. • NOTE: IRS giving many 5500-EZ filers choice of e-filing 5500-SF with EFAST or paper 5500-EZ with IRS.

37. Form 5500 Revisions • IRS-only Schedules (E, SSA) removed to enable • mandatory e-filing. • Enhanced disclosures on plan fees & expenses. • Put 403(b) plans on par with 401(k) plans. • Better info on DB pension funding and multiemployer plans (including PPA changes). • Focused compliance questions added. • Questions & instructions clarified/improved.

38. New Schedule C Reporting • Identify each service provider who received $5,000 or more in comp (direct & indirect). • Includes new codes describing services & types of compensation. • Report total direct comp paid by plan separately from total indirect comp received by provider. • Prior rule requiring plan to identify only top “40” highest paid service providers is eliminated.

39. Schedule C Guidance • Two Sets of Frequently Asked Questions available on EBSA website to help filers apply the instructions • Forms and instructions • Preamble to Notice of Adoption of Final Forms Revisions

40. Small Plan Fee and Expense Reporting • Schedule I filers not subject to Schedule C indirect compensation reporting rules. • Must break out fees on Schedule I paid directly by plan to administrative service providers. • Small plans filing Schedule A must still report information on insurance fees and commissions. • Short Form has questions on direct compensation paid by plan and insurance fees & commissions.

41. New Compliance & Technical Questions • Whether plan paid benefits when due. • Whether plan complied with blackout notice regulations. • New feature codes for plans with automatic enrollment or default investment options. • Standard supplemental schedule for Schedule H reporting delinquent participant contributions.

42. No EFAST Correspondence Under New System • Filers and service providers/submitters should pay close attention to the EFAST2 automatically generated list of errors/warnings. • Filers will no longer receive post-filing written correspondence from EFAST requesting voluntary corrections of errors/incomplete filings within 30 days.

43. 5500-EZ • Form 5500-EZ (paper return) must be filed by – • Any one-participant plan, unless • the plan is eligible to file and chooses to file Form 5500-SF electronically thru EFAST2, or • the plan is not required to file a return because the plan has assets (alone or in combination with the employer’s other one-participant plans) of $250,000 or less at the end of the PY and the return is not for the final PY.

44. Form 5500-EZ • One-participant plan means: • Plan covers owner/owner & spouse and owner/owner & spouse own entire business, whether incorporated or unincorporated; or • Plan covers one or more partners/partners and spouses of a partnership. • Plan does not provide benefits for anyone except owner/owner & spouse or partner(s)/partner(s) & spouse(s).

45. Form 5500-EZ • One-participant plan is eligible to file Form 5500-SF electronically thru EFAST2 if: • Plan is a one-participant plan as defined earlier, and • Plan covered fewer than 100 participants at the beginning of the PY. • One-participant plan filers of Form 5500-SF complete only those parts of the form that correspond to Form 5500-EZ.

46. Form 8955-SSA • Schedule SSA (Form 5500) removed from the Form 5500 series • New, stand-alone 2009 form being established • Do not file with the Form 5500 using EFAST2

47. Retain Paper Copy • Plan administrators must maintain an original of the Form 5500 with all required signatures as part of their records

48. Extension of Time to File • No longer required to attach a copy of Form 5558 • Now, merely check the box on 5500, and if applicable, enter a description of the special extension

49. Form 5500 • One-participant plan may not file an annual return on Form 5500 for 2009 • New plan characteristic codes have been added to line 8 • Plan characteristic code 3E has been removed • Code 3D will identify all pre-approved pension plans for 2009 • Feature codes for certain types of plans have been eliminated

50. Schedule A • A new Part IV has been added for plan administrators to report insurance companies that fail or refuse to provide the information necessary to complete Schedule A