Not all plan sponsors that offer a 403(b) plan must file a Form 5500; namely, those that are not covered by ERISA. But 403(b) plans that are covered by ERISA must file. And they need to be aware that errors are always possible when one files a Form 5500.
Among the many mistakes that are possible are:
- inaccurate participant counts;
- incorrect plan numbers or employer tax identification numbers;
- figures that do not reconcile to the prior year filing, such as participant counts or plan asset figures; and
- failure to report all applicable service provider information on Schedule C, especially concerning inactive providers that are not grandfathered from 5500 disclosure and still receive compensation from plan assets.
The simplest solution to identifying plan errors is to read the form. Many errors are permitted to perpetuate simply because someone didn’t take the time to read the form closely and make certain that they understood every entry.
So to reduce the amount of 5500 errors in a plan, simply read the forms with critical eye, and chances are you will spot an error or two as well!
Editor’s Note: ERISA Tips is a feature provided with you in mind—to make the newsletter more useful to you! If you have any content for ERISA Tips or the NTSA Advisor that you would like to contribute or suggest, please contact John Iekel, editor of the NTSA Advisor, at [email protected]
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