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New Compliance Questions on 2015 Form 5500

The IRS has added new compliance questions to the 2015 version of Form 5500 (Annual Return/Report of Employee Benefit Plan) and Form 5500-SF (Short Form Annual Return/Report of Small Employee Benefit Plan). Though the IRS has announced that plan sponsors should not complete these questions for the 2015 plan year, reporting may be required for 2016.

Four new questions have been added to Schedule H (Financial Information) and Schedule I (Financial Information — Small Plan) of Form 5500. The questions ask for the name and phone number of the plan’s trustee or custodian, whether the plan incurred unrelated business taxable income, and whether the plan made any in-service distributions during the plan year.

In addition, Schedule R (Retirement Plan Information) includes a new Part VII, which asks:

  • Whether the plan is a safe harbor plan or uses the actual deferral percentage (ADP)/actual contribution percentage (ACP) test
  • If the ADP/ACP test is used, whether the current year testing method is also used
  • Whether coverage testing is satisfied by the ratio percentage or the average benefit test
  • Whether the plan was timely amended for all required tax law changes
  • For the date of the plan’s last favorable IRS determination, opinion, or advisory letter
  • Whether the plan is located in a U.S. territory

Similarly, Form 5500-SF, which is generally available for qualifying plans with fewer than 100 participants, includes all of these new questions, and also asks whether required minimum distributions were made to 5% owners who have reached age 70½. Presumably, this question seeks to address an omission common to smaller plans.

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