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EB Flash: EBSA Provides Relief for Certain Form 5500 Filing Errors by Multiple Employer Plans

Employee Benefits Alert

The Employee Benefits Security Administration (EBSA) has issued Field Assistance Bulletin No. 2019-01, which provides penalty relief from certain Form 5500 Annual Return and reporting requirements for multiple employer plans (MEPs) that did not provide a list of participating employers and a contribution estimate for each participating employer.

In 2014, Congress added section 103(g) to the Employee Retirement Income Security Act (ERISA) as part of the Cooperative and Small Employer Charity Pension Flexibility Act. This provision states: "With respect to any multiple employer plan, an annual report under this section for a plan year shall include a list of participating employers and a good faith estimate of the percentage of total contributions made by such participating employers during the plan year." EBSA noted that some MEP administrators may have misunderstood the parameters of the required reporting. 

EBSA pointed out that "[e]xamples of non-compliant filings included forms in which: (1) the filer replaced employer names with either abbreviated names or initials, client numbers, or other labels such as 'Client 1;' (2) the filing reported only the last 4 digits of EINs [employer identification numbers]; (3) the filing included an attachment with no information and a note 'Details available upon request;' and (4) the filing incorrectly listed the PEO [professional employer organization] as the only participating employer."

The guidance issued yesterday "gives transition relief for MEPs that have failed to file a complete and accurate list of participating employers with their Form 5500 for the 2017 plan year and before." The relief covers only civil penalties for Form 5500 reporting obligations and does not address any other issue under ERISA or the Internal Revenue Code. The Field Assistance Bulletin also provides MEPS with a special filing extension for up to two and a half months to file their 2018 Form 5500 in compliance with section 103(g) of ERISA. Notwithstanding today's guidance, EBSA says it expects full compliance with these reporting obligations going forward.

The four-page text of EBSA's Field Assistance Bulletin is posted here.

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