Along with the required compliance testing that plans need to be done, another important factor with operating a plan is that the financials and operations of the plan need to be reported to government entities to maintain the compliance status of the plan. Failure to report or file can result in a plan incurring heavy financial penalties and potentially being disqualified from operating entirely.
One of the most important items that need to be reported each year is the Form 5500. We go over the Form 5500 in some more detail in our dedicated article - “What is the Form 5500”. To explain briefly, this tax filing form is generally required for all retirement plans, with a few exceptions, and is due seven months following the close of the previous plan year-end or an extra two and a half months following an extension.
Summary Annual Report (SAR)
A related piece of the Form 5500, the Summary Annual Report, or SAR for short, is a brief document that describes what was reported in the Form 5500 but is required to be distributed to all eligible participants of the plan (this even includes those with no balance and terminated employees with a balance.) The SAR must be provided to all participants no later than September 30th of the following year; however, if the Form 5500 filing deadline is extended, the deadline for distributing the SAR is then set to December 15th. For non-calendar-year plans, the deadline is two months following the deadline for filing Form 5500.
As we’ve been referring to the extension that can be done, the Form 5558 is the specific name that allows a plan to extend its filing deadline. This tax form must be submitted by the July 31st deadline for calendar plans. For non-calendar plans, the deadline is seven months following the last day of the plan year.
As participants terminate their employment due to various reasons, if a balance remains in the plan after their leaving, it may be likely these accounts need to be reported on the Form 8955-SSA. This tax filing is exactly as described, a way to report a remaining balance to the government entities for tracking purposes and make sure participants are aware that a balance in their account still exists to be distributed from the plan. This filing shares the same filing deadline as the Form 5500 and is affected by the extension from the Form 5558.
The last notable is the Form 5330, which is used as a form to communicate and report certain plan corrections that were done during the year. This could encompass late contributions, corrective refunds beyond a deadline, or an excess contribution above the company’s annual deduction limit amongst a few things. The deadline to file this form depends on what the purpose of the filing is. If you feel a correction is needed or are unsure, make sure to contact Vestwell or your current service provider to see how they can assist. More details about the Form 5330 can be found in our dedicated article - “Form 5330 FAQ”