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20 Cards in this Set
- Front
- Back
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When a plan year coincides with the employer’s tax year and the employer has an extension for filing their federal income tax return, the Form 5500 filing for the plan is automatically extended to the same date. |
TRUE form 5500 filing for the plan is automatically extended to the same date the employer's tax year is, if plan year and employers tax year coincide. |
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A plan whose only participants are the sole owner of the business and the owner’s child may be eligible to file Form 5500‐EZ. |
NO the from 5500-EZ is only for the owner of the business and their spouse. If a child is a participant, the plan is no longer eligible for Form 5500‐EZ filing status. a regular 5500 would be used. |
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An owner‐employee who sponsors a defined benefit plan and a profit sharing plan,and is the only participant, must file Form 5500‐EZ for each plan if the plans together have assets of more than $250,000. |
TRUE they must be filed individually |
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Form 5500 is filed with EBSA and Form 5558 is filed with the IRS. |
TRUE from 5500 is filed with the EBSA (employee benefit security administration) from 5558 is file with IRS (used to file an extension with IRS on froms 5500). participant should not be included on Form 8955‐SSA if. The filing deadline for Form 8955‐SSA is the last day of the seventh month following the close of the plan year. example: deadline is July 31, 2015, for a plan year ending December 31, 2014. Form 8955‐SSA may be submitted electronically using third‐party software and IRS’ Filing Information Returns electronically (FIRE) system. |
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The IRS is the only agency that can impose penalties for Form 5500 noncompliance. |
NO Both the IRS and the DOL can impose penalties for Form 5500noncompliance. Form 5500 (reports to DOL & IRS). can be file electronically. used by all plans unless they can use 5500-EZ Form 5500-EZ (reports to IRS only). only for owner of company and their spouse (cant file if child is participant of plan, then they use 5500) cannot be file electronically From 5500-SF (reports to DOL & IRS) used by pension plans, money purchase & target plans. must file electronically |
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Only large plan filers need to file an accountant’s report with Form 5500. |
NO A small plan filer is only exempt from the audit requirement if it satisfies the investment, bonding and disclosure requirements regarding qualifying plan assets. a form 5500 is not needed. |
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A small plan filer with 115 participants at the beginning of the plan year must file as a large plan filer for that year. |
NO A small plan filer is except form audit, unless it has more than 120 participants at the beginning of the plan year. which would then make it a large plan, and thus be subject to an audit. the 80-120 Rule a small plan filer is one that covers fewer then 100 ptp at the beginning of the plan year but not above 120. so a plan with 120 or few at the beginning can still be considered a small plan filer, unless it gos above that number. and a large plan filer is a plan that covers 100 ptp or more at the beginning of the plan year and can even go as far down as 80 it can still be seen as a large plan, unless it goes below 80. |
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The filing deadline for Form 5500, without extension, is the last day of the seventh month following the end of the plan year. |
TRUE exp if plan year end on 05/31, they would have until 7 moths after that, which is 12/31 to file. |
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The DFVC Program may be used by late filers of Form 5500 to significantly reduce the penalties for noncompliance. |
TRUE DFVC provides plan sponsors with means of filing late returns voluntarily in exchange for significantly reduced DOL late filing fees. reduced penalties for filing late can be: --$10 per day for basic late filing penalty --$750 for small plans with a cap of $1,500 large plans cap is $4,000 Penalties for Failing to File or for Deficient Filings
IRS PENALTY: $25 per day with a maximum penalty of$15,000 (applicable after 600 days) with respect to the filing required for a plan year DOL PENALTY: DOL may impose a civil penalty of up to$1,100 per day with no limit§ DOL may impose a penalty for certain missing items --$150 per day for missing accountant’s report ($50,000 cap) --$100 per day for financial reporting items ($36,500 cap) --$10 per day for other report items ($3,650 cap) SEPARATE PENALTIES FOR CERTAIN SCHEDULES. --The penalty for the Schedules SB and MB is $1,000,regardless of how late the filing is made --The penalty for Form 8955‐SSA is based on the number of participants that should have been reported on the schedule. This penalty is $1 per day, per participant, up to $5,000 per plan year. |
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Small plan filers may be exempt from the audit requirement. |
TRUE |
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Which of the following is/are situations in which participants need not be reported on Form 8955‐SSA? I. If benefit payments have commenced before the participant was reported onForm 8955‐SSA II. If a participant previously reported with deferred vested benefits on Form8955‐SSA now commences benefits III. If the participant has returned to covered service before the participant wasreported on Form 8955‐SSA A. I only B. II only C. I and III only D. II and III only E. I, II and III |
C if benefit payments commenced before or after the participant was reported on form 8955 SSA. if benefits payments started during, then yes. A participant previously reported with deferred vested benefits on Form 8955‐SSA must again be reported when the participant commences benefits. |
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All of the following statements regarding Form 5500 schedules are TRUE, EXCEPT: A. Large plan filers use Schedule H to report certain financial information about the plan. B. Schedule C is used to report service provider information. C. Schedule A is used to report insurance information.. D. Schedule D is used to report actuarial information.. E. Prohibited transactions are one of the items reported on Schedule G. |
D Actuarial information is reported on Schedule SB or Schedule MB. Schedule D is for participant and DFE information. SCHEDULE REQUIREMENTS WITH FORM 5500 Schedule A-insurance information. --not required with form 5500-EZ Schedule B, SB or MB-Actuarial Information. --filed with single-employer pension plans. MB must be filed by multiple employer pension plans and money purchase plans. Schedule C-Service provider and Trust info --onlyservice providers who receive $5,000 or more in reportable compensationdirectly or indirectly from the plan must be listed on Schedule C. Schedule D-Direct filing Entity/ptp plan --schedule service two purposes 1. a standardized form is provided for filing by a Direct Filing Entity (DFE) 2. a form is provided for certain plans to report their participation ina DFE Schedule G-Financial information --financialinformation (including loans and leases in default and prohibited transactions)on Form 5500 Schedule H-Financial information on Large plans --Large plan filers must include information about reportable transactions that involve at least 5 percent of plan assets and a schedule of assets Schedule I-Financial information on small plans --Small plans that covered fewer than 100 participants at the beginning of the plan year and that are not eligible to file Form 5500‐SF must include this schedule with Form 5500 Schedule R-Pension Plan Information --This schedule is required for both large and small pension plan filers filing Form 5500. doesnt have file 5500-SF Audit by Independent Qualified Public Accountant --largeplan must provide an accountant’s report prepared by an independent qualifiedpublic accountant with regard to the plan assets |
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All of the following statements regarding Form 5500 filing deadlines are TRUE,EXCEPT: A. A plan year ends December 31, 2014. Form 5500, without extension, is due July 31, 2015. B. A terminated plan distributed the plan assets on October 6, 2014. Form 5500,without extension, is due May 6, 2015. C. A plan year ends November 30, 2014. Form 5500, with extension, is due September 15, 2015. D. A short plan year runs from June 1, 2014, to August 31, 2014. Form 5500, with extension, is due June 15, 2015. E. A plan year ends March 31, 2015. Form 5500, without extension, is due October 31, 2015. |
B The filing deadline, without extension, is the last day of the seventh month following the distribution of assets, or May 31, 2015 in this case. |
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All of the following statements regarding the small plan audit exemption are TRUE,EXCEPT:A. A small plan filer that does not satisfy the audit exemption files as a large planfiler, including an accountant’s report and Schedule H with the filing. B. A small plan filer with 98 percent of assets invested in qualifying assets may beexempt from the audit requirement. C. A small plan filer with 90 percent of assets invested in qualifying assets and a fidelity bond for the remaining ten percent of non qualifying assets may be exempt from the audit requirement. D. Employer securities are considered qualifying plan assets when determining if the small plan audit exemption applies. E. The percentage of assets that are qualifying plan assets is determined at thebeginning of the plan year |
A A small plan filer that does not satisfy the audit exemption still files as a small plan filer, including an accountant’s report with Schedule I, rather than Schedule H. |
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Which of the following is/are exempt from Title 1 Form 5500 reporting requirements? I. SEP II. SIMPLE IRA III. Governmental plan A. I only B. II only C. I and III only D. II and III only E. I, II and III |
E All of the plan types listed are exempt from Form 5500 reporting. |
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All of the following statements regarding Form 5500 penalties are TRUE, EXCEPT: A. The DOL penalty for failure to file Form 5500 may be up to $1,100 per day with no limit. B. The IRS penalty for failure to file Form 5500 is $25 per day with a maximum penalty of $15,000. C. The DOL may not impose a penalty for missing items, like an accountant’s report, if the Form 5500 filing is timely. D. Under the DFVC Program, plan sponsors may voluntarily file late returns in exchange for a significantly reduced late filing penalty. E. If the plan is a small plan filer, the maximum penalty under the DFVC Program for a single late Form 5500 is $750. |
C The DOL may impose a penalty for missing items, like an accountant’s report,even if the Form 5500 filing is timely. |
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Which of the following statements regarding Form 5500 audits is/are TRUE? I. A third party administration firm is required to obtain an SOC 1 report. II. Auditors often rely on SOC 1 reports to determine whether plans areoperating properly. III. An accountant would not be considered independent of the plan if the accountant is a service provider. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
D Service organizations are not required to obtain an SOC 1 report. but many do. The SOC 1 report, together with other information about the plan sponsor, helps the plan’s auditor understand the aspects of the service organization’s controls that may affect the processing of the plan’s transactions. Aservice auditor may issue two types of reports under SSAE No. 16; type 1 andtype 2. The user auditor generally will request to receive a type 2 report SOC 1Type 1 Report --service auditor expresses an opinion on whether the service organization’s description of its controls is fairly presented (that is, whether it describes what actually exists) and whether the controls included in the description are suitability designed SOC 1Type 2 Report --serviceauditor’s report contains the same opinions as those in a type 1 report, butalso includes an opinion on whether the controls are operating effectively.am |
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All of the following statements regarding Form 5500 filings are TRUE, EXCEPT: A. No schedules are required to be filed with Form 5500‐SF. B. A one‐participant owner plan with $500,000 of plan assets is not required to file Form 5500‐EZ. C. A plan that covers the business owner and one employee is not eligible to file Form 5500‐EZ. D. A non‐ERISA 403(b) plan that satisfies the DOL exception is not required to file Form 5500. E. Generally, a large plan filer for Form 5500 purposes is a plan with more than 100participants on the first day of the plan year. |
B A one‐participant owner plan with assets over $250,000 is required to file Form 5500‐EZ. no schedules are required to be filed with form 5500-SF is correct from 5500-EZ is only used for owner of the company and spouse, no one else. so an owner and an employee, not a spouse, would not be eligible. |
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All of the following statements regarding the DFVC Program are TRUE, EXCEPT: A. The penalty under the DFVC Program may be paid from plan assets. B. If more than one plan is involved, a separate DFVC submission must be made for each plan. C. A completed Form 5500 must be filed for each plan year for which DFVC reliefi s sought. D. IRS penalties for a late filing of Form 5500 are automatically waived for a plan that participates in the DFVC Program. E. The DFVC Program has a per‐plan cap, which provides a maximum penalty for plans that have failed to file for multiple years. |
A The penalty under the DFVC Program is a personal liability of the plan administrator and, thus, may not be paid from plan assets. Payment of the penalty with plan assets would constitute a prohibited transaction and also would violate the exclusive benefit rule. |
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Which of the following statements regarding fidelity bonds is/are TRUE? I. Plan assets may not be used to purchase the fidelity bond. II. The minimum required bond amount is $1,000, even if this exceeds 10 percent of the amount of funds being handled. III. The maximum required bond amount is $500,000 for plans that hold employer securities. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
B the minimum required to bond amount is $1,000, even if 10% of the amount of funds are being held is exceeded, is correct. Plan assets may be used to purchase the fidelity bond. The maximum requiredbond amount is $500,000 for plans that hold NO employer securities and up to $1million for plans that hold employer securities. |
