On July 24, the Department of Labor (DOL) issued Field Assistance Bulletin 2019-01 providing guidance and temporary relief related to certain Form 5500's filed for multiple-employer plans (MEPs). In particular, MEPs are required to attach to the annual Form 5500 a list of all participating employers in the plan. The DOL has found in a recent compliance review that a substantial number of MEP filers were not in full compliance with this obligation. As a result, the DOL has initiated an enforcement effort and has begun to correspond with filers in 2019 on this issue.
In general, a multiple-employer plan (MEP) is a plan/arrangement that is maintained by more than one unrelated employer and is permitted to file a consolidated Form 5500 for all of the employers. In particular, multiple-employer pension plans and multiple-employer welfare plans are required to file a Form 5500 that includes an attachment listing: (1) each participating employer in the plan during the plan year, identified by name and employer identification number (EIN), and (2) a good faith estimate of each employer's percentage of the total contributions (including employer and participant contributions) made by all participating employers during the year. (Unfunded and/or fully-insured welfare plans that are exempt from filing financial information with their Form 5500 do not have to include an estimated amount of contributions from each employer.)
In the Bulletin, the DOL has provided specific examples of non-compliant filings. Those include participating employer attachments in which: (1) the filer replaced the employer names with either abbreviated names or initials, client numbers, or other labels, (2) there are missing EINs, or only the last 4 digits of the EINs have been provided, (3) instead of the required information, there is an attachment with a note "details available on request, " and (4) the attachment incorrectly lists the plan sponsor or Professional Employer Organization (PEO) as the only participating employer.
Transition Relief for Annual Reporting Civil Penalties
Before the DOL proceeds with further civil penalty enforcement in this area, it is offering transition relief to plan administrators of MEPs who voluntarily comply with the annual reporting requirements. Specifically, the DOL expects plan administrators to fully comply going forward (starting with the 2018 Form 5500). In light of the July 31, 2019 due date for calendar year plans to file their 2018 Form 5500, the DOL is granting MEPs a special filing extension of up to 2-1/2 months. For an MEP that has already filed their 2018 Form 5500, an amended annual report must be filed by October 15, 2019 with the corrected information.
Provided that Form 5500's filed for the 2018 plan year and all subsequent plan years comply with the requirements specified therein, the DOL will not reject a Form 5500 filed on behalf of a MEP for the 2017 plan year, or any prior plan year, or seek to assess civil penalties against the plan administrator, solely on the basis that the plan administrator failed to include complete and accurate participating employer information.
Please contact Lisa Edwards at firstname.lastname@example.org for a complimentary review of your MEP Form 5500 and details on how to take advantage of the transition relief, if necessary.