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Form 5500 Electronic Filing Includes Changes to Reporting Forms and

Beginning with 2009 plan years, employers will be required to file Form 5500 for pension and other
employee benefit plans electronically. Mandatory electronic filing — known as the ERISA Filing
Acceptance System, or EFAST2 — was slated to become effective for 2008 plan year filings, but in
final regulations implementing the electronic filing requirement the agencies with Form 5500
oversight (the Department of Labor, Internal Revenue Service and Pension Benefit Guaranty
Corporation) delayed mandatory electronic filing to the 2009 plan year. Since Form 5500 is due at
the end of the seventh month after the close of the plan year, this means that employers with
calendar year plans will have a first required electronic filing deadline of July 31, 2010.

The Form 5500 Annual Return/ Report is the primary source of information concerning the
operation, funding, assets and investments of pensions and other employee benefit plans. Form
5500 filings serve as a disclosure document for plan participants and beneficiaries, a compliance
and research tool for the agencies with 5500 oversight, and a source of information and data for
assessing pension and employee benefit trends and developing policy.

Electronic filing is intended to streamline and simplify the filing process, especially for small
businesses; increase the transparency of plan- related fees and expenses; and provide additional
information about plan investments. To this end, some schedules associated with 5500 filing that
were required only for the IRS have been eliminated, and other schedules have been modified.
Specifically, Schedule E for ESOP information and Schedule SSA (identifying separated
participants with deferred vested benefits) will no longer be required once e- filing is fully
implemented (i.e., beginning with reporting for the 2009 plan year). Information previously included
on these schedules will be captured in other ways.

Certain small plans (single- employer plans covering fewer than 100 participants, which meet
specified conditions regarding their investments held or issued by regulated financial institutions,
and which have a readily determinable fair market value) will be able to file a Form 5500SF (Short
Form) instead of the regular 5500.

As to specific attachments:

• Schedule A (Insurance Information) is required if any pension or welfare benefits under the plan
are provided by, or if the plan holds any investment contracts with, an insurance company,
insurance service or other similar organization. Schedule A remains largely unchanged, but will now
include a space for administrators to report a failure or refusal by an insurance carrier to provide
necessary information. Other minor changes are intended to improve Schedule A’s usefulness for
reporting insurance fees or commissions.

• Schedule B (Defined Benefit Plan Actuarial Information) has been divided into two separate
schedules, Schedule SB for single employer plans and Schedule MB for multiemployer plans and
certain money purchase plans. These schedules are required for defined benefit plans subject to
minimum funding standards. In general, the revised schedules will require more detailed
information on asset allocation.

• Schedule C (Service Provider Information) is filed by large plans, to report payments made to
service providers. The $5,000 reporting threshold has been retained for identifying any person who
received at least this amount during the plan year, directly or indirectly, in connection with services
rendered to the plan or their position with the plan. To enhance disclosure, direct compensation
paid by the plan will be reported on a separate line item from indirect compensation received from
sources other than the plan or plan sponsor. Additionally, current codes have expanded to better
identify the types of services and types of fees. The schedule includes an alternate reporting option
for service providers whose compensation in relation to the plan is limited to “eligible indirect
compensation” (certain specified types of common investment- related fees). As with Schedule A,
revised Schedule C includes space for plan administrators to list service providers who failed or
refused to provide information necessary to complete the schedule.

• Schedule R (Retirement Plan Information) will now ask for information previously requested in the
eliminated Schedule E. Other modifications include additional questions required by the Pension
Protection Act of 2006 and to collect information needed by the PBGC to enable it to properly
monitor the plans it insures. For example, the schedule now includes asset allocation questions for
defined benefit plans with more than 1,000 participants, which now must provide a breakdown of
plan assets by type of investment.

• Schedule I (Small Plan Financial Information) will require small plans to report administrative
expenses separately from other expenses. On both this schedule and Schedule H (for large plans)
a standard format has been adopted for use in connection with an independent qualified public
accountant rendering an opinion on information relating to delinquent participant contributions.
As noted at the beginning of this article, full electronic filing begins with filings for the 2009 plan
year. For many plans, compliance will require updating information management and
recordkeeping systems and necessitate changes in the way plans collect and keep plan
information. Consult with your plan administrator or benefits professional for what your company
needs to do to prepare.