Believe it or not, the due date for annual Form 5500 filings is once again approaching.  As a reminder, Forms 5500 are due by the last day of the seventh month following the end of the plan year.  A 2½ month extension will automatically be granted upon filing a Form 5558.  For calendar year plans, a Form 5558 must be filed by July 31 for an extension to file Form 5500 by October 15.

Changes to Form 5500 for 2023 Filings

  • Participant-count methodology:  Previously, “active participants” included all individuals who were eligible for a plan.  Beginning with filings for the 2023 plan year, the “active participants” only includes those individuals with account balances in the plan.  This change is important for plans that are near the 100-participant threshold which requires an annual plan audit by an independent qualified public accountant (IQPA).  Keep in mind that the “80-120 participant rule,” which permits a plan to file as a small plan (thus avoiding the IQPA audit) as long as the plan filed as a small plan in the year prior, remains unchanged.
  • Financial information required on the Schedule H:  The Schedule H has always required reporting of administrative expenses; however, the reporting was limited to categories for professional fees, contract administrator fees and investment advisory and management fee and a catchall category of other fees.  Beginning with the filing for the 2023 plan year, the category of “professional fees” has been eliminated, but reporting on the following additional categories is required:
  • Salaries and allowances
  • Recordkeeping fees
  • IQPA audit fees
  • Bank or trust company trustee/custodial fees
  • Actuarial fees
  • Legal fees
  • Valuation/appraisal fees
  • Other trustee fees and expenses.

The additional categories are meant to increase transparency.  However, plan sponsors should remember that Form 5500 filings are public and the additional disclosures relating to fees paid by plans could come with additional scrutiny by the Department of Labor (DOL) or plan participants.  Thus, plan fiduciaries should continue to scrutinize fees paid by plans and ensure that fees paid are for reasonable administrative services and fees are commensurate with services provided.

  • Schedule R, new “Part VII”:  This new disclosure on Schedule R requires a plan to report whether it satisfies coverage and nondiscrimination tests through a combination with other plans under the permissive aggregation rules.  Note that a plan need not disclose whether coverage and nondiscrimination testing has passed or failed, but simply requires a statement as to whether the plan has been permissively aggregated with other plans to pass testing.  Additionally, a plan that uses a design-based safe harbor will now be required to note as much on the Form 5500 and will have to include whether the plan uses a prior year or current year ADP testing methodology.  Lastly, if a plan uses a pre-approved plan document, the date the pre-approved plan received an IRS Opinion Letter and the Opinion Letter serial number must also be reported.

DOL Review of Forms 5500

As Forms 5500 are publicly available, Forms 5500 should be reviewed and scrutinized before filing with the DOL.  The DOL routinely uses information from Forms 5500 to identify potential violations.  The DOL is currently focused on the reporting of late contributions.  The DOL’s plan asset rules require that employee deferrals and loan repayments be segregated from the employer’s general assets as soon as administratively practicable, but in no event later than the 15th business day following the end of the month in which such amounts are withheld from wages.  However, this rule is not a safe harbor and more often than not, “as soon as administratively practicable” is much sooner than the 15th business day following the end of the month in which such amounts are withheld from wages.  Plans are required to report on Form 5500, Schedule H if there has been a failure to timely transmit any participant contributions.  The DOL regularly sends letters to plan sponsors who have reported late contributions inviting them to self-correct via the DOL’s Voluntary Fiduciary Correction Program. 

Mitigation of Litigation

Forms 5500 which are publicly available include data that can be mined for potential inconsistencies and irregularities.  Fee and expense information has frequently been cited in lawsuits alleging excessive fees.  Recent lawsuits have also targeted plans related to the use of plan forfeitures using data obtained from Forms 5500.  Plan fiduciaries should be aware of the importance of the information being reported on Forms 5500 and in the annual audit reports and how such information could potentially be cited in litigation.


Third parties are often responsible for the preparation of the annual Forms 5500.  However, plan fiduciaries should not rely solely on outside parties to complete Forms 5500 on their own.  Forms 5500 are signed under the penalty of perjury and thus should be reviewed closely to ensure that the information reported is accurate and the signer understands the information being reported.