Another Day, Another Deadline – Don’t Miss the 5500 Deadline for Your 401(k) Plan!

April 15, 2014

Congratulations!  March 15th has come and gone and your 401(k) compliance testing is done and refunds have been issued.   Now you can relax!  Or can you?  You still need to make sure your Form 5500 is filed for last year.  Failing to file on time or failing to file the Form 5500 with audited financial statements, if required, can be quite costly.  Don’t let this deadline sneak up on you.

Form 5500 must be filed electronically by the last day of the 7th calendar month after the plan year-end.  For the calendar year 2013 plans, this is July 31, 2014.  Filing an automatic extension, Form 5558, extends the deadline an additional 2 ½ months, to October 15th for calendar year-end plans.  A penalty of up to $1,100 a day can be assessed for each day a plan administrator fails to file a complete and accurate return!

That deadline may seem far away, but if you are a large plan filer (generally more than 100 participants at the beginning of the plan year) and you must file audited financial statements with your Form 5500, you need to start the process now.  Typically, once compliance testing has been completed, the third-party administrator and your custodian can move forward in providing you with an audit package and certified trust report.   Be on the lookout for these items from the end of March to any time in May, depending on the provider.  Once you know when these reports will be available, it is important that you reach out to your audit firm immediately to schedule the plan audit.  If you want to file by the July 31st deadline, you need to schedule the audit early enough to allow enough time to resolve any issues identified.

The time that elapses between the onsite audit fieldwork and issuance of the final audit report can vary significantly.  In order to minimize the turnaround time, communication between you and your auditor and timely follow-up on open items are key and must be demonstrated by all involved parties.   Agree upon a timeline with the auditor upfront, meet your commitments and make sure they meet theirs.  If issues arise, dedicate resources to resolving the issues as soon as possible.  If all parties work together and communicate, you should not have any problem meeting the filing deadlines.  However, if you start the process too late, and don’t prioritize effectively, you could find yourself in a stressful position on October 14th.

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