DOL, IRS and PBGC Release Advance Copies of 2021 Forms 5500

On December 29, 2021, the DOL, IRS and PBGC (the “agencies”) published advance copies of the 2021 Form 5500 Annual Return/Report (including Form 5500-SF for small plans) and related instructions in the Federal Register. The 2021 Form 5500-EZ and instructions were also released and are available on the DOL website.

Certain updates to the form instructions were necessary to implement annual reporting changes related to SECURE Act amendments to ERISA and the code that apply to multiple-employer defined contribution pension plans, including the new pooled employer plans (PEPs). Provided certain conditions are met, PEPs allow multiple unrelated employers to participate in one plan that files one Form 5500.

The notable Form 5500 and Form 5500-SF changes include the following:

• The instructions have been revised to require multiple-employer defined contribution pension plans to report aggregate account balance information by employer on the existing Form 5500/Form 5500-SF attachment for reporting participating employer information. (Prior to SECURE Act changes, employers were only required to report estimates of the percentage of total contributions made by participating employers during the plan year.)
• As a result of the SECURE Act authorization for PEPs to begin operating in 2021, the Form 5500 instructions have been amended to make clear that a PEP is a multiple-employer plan that files a single Form 5500 Annual Return/Report. PEPs are required to check the multiple-employer plan box in Part A of Form 5500 and include the attachment for reporting participating employer information. These plans must also indicate whether the pooled plan provider (PPP) administering the plan has complied with the Form PR (Pooled Plan Provider Registration) filing requirements. If so, the AckID acknowledgement code number for the PPP’s latest Form PR filing must be referenced. Form 5500-SF was also updated to indicate that PEPs must file Form 5500 and cannot file Form 5500-SF.
• A new checkbox is added to Part I of Form 5500 and Form 5500-SF for a plan sponsor who adopted the pension benefit plan in the 2021 plan year and treated the plan as being adopted and effective in the 2020 plan year pursuant to SECURE Act Section 201. For defined benefit plans in this category, the 2021 instructions provide information about how to report data regarding 2020 funding requirements (i.e., Schedule SB data).
• The form instructions were updated to reflect an increase in the maximum civil penalty amount assessable under ERISA section 502(c)(2), which applies to a failure to file a Form 5500.
• A new line 3(d) was added to Schedule MB to require a multiemployer defined benefit plan to report the amount of withdrawal liability payments included in line 3(b) employer contributions. Line 6c, mortality table, was revised to add new mortality tables released by the Society of Actuaries and to simplify reporting of older mortality tables. Line 7, New Amortization Bases Established, has been revised, reflecting changes made by the ARPA for Code 8 to be used for net investment losses and other losses related to COVID-19 incurred in either or both of the first two plan years ending after February 29, 2020.
• Schedule SB, Line 6, target normal cost, was broken down into new lines 6a, 6b and 6c. Line 6a requires the plan to report the present value of current plan year accruals decreased by any mandatory employee contributions. Line 6b requires the plan to report expected plan-related expenses included in the target normal cost, and line 6c requires it to report the total target normal cost (i.e., the sum of lines 6a and 6b). The table in the instructions for line 27 contains an additional code (Code 9) for community newspapers as described in the SECURE Act.

These advance copies are for informational purposes only and cannot be used to file a 2021 Form 5500 or schedule. Employers must wait until the agencies publish the final versions. However, employers may want to familiarize themselves with the updated forms and instructions.

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Form 5500 Series Informational Forms »