The Department of Labor announced the release of informational copies of the 2024 Form 5500 – the DOL and IRS annual pension and welfare benefit plan reporting requirement, under the Employee Retirement Income Security Act (ERISA) – and related instructions online.
The DOL made the announcement on Monday, along with its Employee Benefits Security Administration, the IRS and Pension Benefit Guaranty Corp. The IRS will release paper copies of Form 5500-EZ and instructions for 2024 separately on its website after Jan. 1, 2025. Form 5500-SF, IRS Form 5500-EZ, IRS Form 5558, and related instructions, are also available online.
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Form 5500, a source of information and data for other Federal agencies, Congress, and the private sector to assess employee benefit, tax, and economic trends and policies, reports information on the qualification of the plan.
The Form 5500 Series is part of ERISA's overall reporting and disclosure framework, which is intended to assure that employee benefit plans are operated and managed in accordance with certain prescribed standards and that participants and beneficiaries, as well as regulators, are provided or have access to sufficient information to protect the rights and benefits of participants and beneficiaries under employee benefit plans.
Form 5500 also acts as a standard for 401(k) plans, giving an indication of administrative fees plans are paying. Of the 6,566 companies with more than 100 employees reviewed by an Abernathy-Daley analysis, 5,241 reported administrative costs greater than the most efficient baseline costs broadly available.
"Our proprietary analysis of a vast swath of Form 5500 data clearly indicates a majority of companies are likely overpaying what's necessary for plan administration fees," said Steven Abernathy, Principal and Chairman of Abernathy Daley 401K Consultants.
Federal regulations require that pension and welfare benefit plans file an annual return/report regarding their financial condition, investments and operations. Generally, plans file the necessary Form 5500 series return/report along with required schedules and attachments.
Among the changes for 2024 filing:
- Defined contribution group plan arrangements may, without needing to attach a list of participant plans, file for an extension of time to file Form 5500
- Modifications to the process of filing an attached Schedule SB reporting expected benefit payment projections when plans are reporting on benefits to be paid in the form of an annuity
- A new plan characteristics code, 2Y, for pension-linked emergency savings accounts created by SECURE 2.0
- An update to Schedule SB instructions for certain expected benefits payable in annuity form.
Related: 80% of 401(k) plans are overpaying on administrative fees, facing ERISA non-compliance
Beginning Jan. 1, 2025, Form 5558, Application for Extension of Time to File Certain Employee Plan Returns, can be electronically filed through EFAST2 or filed with the IRS using a paper Form 5558. A Defined Contribution Group reporting arrangement can file a single Form 5558 for plans participating in the DCG and is not required to attach a list of participating plans to the Form 5558.
For questions related to filing the Form 5500 series, plan administrators should email at [email protected].
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
