DOL Updates Form 5500 for 2023

The Department of Labor announced its annual revisions to Form 5500 Thursday.

The DOL updates Form 5500 annually to keep it up-to-date with various regulatory changes. All employee benefit plan sponsors are required to file a 5500 to the IRS and DOL annually. The form discloses information about a plan’s finances and operation. The forms are required under Title I and IV of the Employee Retirement Income Security Act of 1974 and are used both to ensure compliance by and to gather data on pension plans.

The changes for 2023 included a consolidated Form 5500 option for certain defined contribution plans; improved reporting for pooled employer plans and multiple employer plans; a change in methodology for identifying small plans for reporting purposes; improvements in reporting by PBGC-covered defined benefit plans on Schedules R and SB; the addition of Internal Revenue Code compliance questions to improve tax compliance; and technical adjustments that address changes made by the SECURE 2.0 Act of 2022.

For determining which plans are under the 100-participant threshold and considered small plans, plans now count only participants that have account balances at the start of the plan year. Previously, plans had to count all employees eligible to participate in the plan.

The changes to Form 5500 for 2023 also implement changes included in the SECURE Act of 2019 that take effect this year. Specifically, the DOL and IRS were required to modify Form 5500 so that members of group DC plans may file a single, aggregated report which satisfies both ERISA and the IRC.

Form 5500 was also modified to implement SECURE Act changes which created PEPs. To do this, a new schedule, Schedule MEP will be added. According to the DOL, many PEP-specific questions have been streamlined based on input from public commenters.

The DOL projects that the simplifications made to reporting for 2023 will save the retirement industry about $95 million this year.

 “Mock-ups of the forms and instructions will be available on www.reginfo.gov as part of the Paperwork Reduction Act clearance process,” the DOL announcement stated. “The normal release of ‘for information-only’ copies of the forms and instructions will happen later in 2023.”