EFAST Processing System

Under the computerized ERISA Filing Acceptance System (EFAST), you can choose between two computer scannable forms to complete and file your 2002 Form 5500: "machine print" and "hand print." Machine print forms are completed using computer software from EFAST approved vendors and can be filed electronically or by mail (including certain private delivery services). Hand print forms may be completed by hand, typewriter or by using computer software from EFAST approved vendors. Hand print forms can be filed by mail (including certain private delivery services); however they cannot be filed electronically. For more information, see the instructions for How To File on page 5.

EFAST Processing Tips

To reduce the possibility of correspondence and penalties, we remind filers that:

• Paper forms must be obtained from the IRS or printed using software from an EFAST approved software developer.
• Filings using photocopies of the computer scannable forms and schedules may be returned or cause correspondence requiring additional information.
• All information should be in the specific fields or boxes provided on the forms and schedules. Information entered outside of the fields or boxes may not be processed.
• Do not use felt tip pens or other writing instruments that can cause signatures or data to bleed through to the other side of the paper. One-sided documents should have no markings on the blank side.
• Paper should be clean without glue or other sticky substances.
• Do not staple the forms. Use binder clips or other fasteners that do not perforate the paper.
• Do not submit extraneous material or information, such as arrows used to indicate where to sign, notes between preparers of the report, notations on the form, e.g., DOL copy, etc.
• Do not submit unnecessary or blank schedules. Except for certain Schedule SSA filings specifically permitted by the instructions, schedules should be submitted only with a Form 5500 or in response to correspondence from the Pension and Welfare Benefits Administration (PWBA) regarding the processing of your return/report.
• Manual entries on the machine print forms are not permitted.
• Submit all schedules (including the correct number of schedules) for which a box is checked on Form 5500, Part II, line 10.
• Do not attach or send any payments to EFAST.
• All Forms 5500 and 5500-EZ must be filed with the PWBA either electronically or at the EFAST address specified on page 5.
• Clearly identify all attachments. At the top of each attachment, indicate the schedule and line, if any (e.g., Schedule I, Line 4k), to which the attachment relates.

About the Form 5500

The Form 5500 Annual Return/Report is used to report information concerning employee benefit plans and Direct Filing Entities (DFEs). Any administrator or sponsor of an employee benefit plan subject to ERISA must file information about each plan every year (Code section 6058 and ERISA sections 104 and 4065). Some plans participate in certain trusts, accounts, and other investment arrangements that file a Form 5500 as DFEs. See Who Must File on page 3, When To File on page 4 and Where To File on page 5.

The Internal Revenue Service (IRS), Department of Labor (DOL), and Pension Benefit Guaranty Corporation (PBGC) have consolidated certain returns and report forms to reduce the filing burden for plan administrators and employers. Employers and administrators who comply with the instructions for the Form 5500 and schedules will generally satisfy the annual reporting requirements for the IRS and DOL.

Plans covered by the PBGC have special additional requirements, including filing Annual Premium Payment (PBGC Form 1 Packages) and reporting certain transactions directly with that agency. See PBGC's Premium Package (Form 1 Packages).

Each Form 5500 must accurately reflect the characteristics and operations of the plan or arrangement being reported. The requirements for completing the Form 5500 vary according to the type of plan or arrangement. The section What To File on page 7 summarizes what information must be reported for different types of plans and arrangements. The chart on pages 11 and 12 gives a brief guide to the annual return/report requirements for the 2002 Form 5500.

The Form 5500 and attachments are screened by a computer process for internal consistency and completeness. The filing may be rejected based upon this review. We urge all employers and plan administrators to provide complete and accurate information and otherwise comply fully with the filing requirements.

ERISA and the Code provide for the assessment or imposition of penalties for not submitting the required information when due. See Penalties on page 6.

Annual reports filed under Title I of ERISA must be made available by plan administrators to plan participants and by the DOL to the public pursuant to ERISA sections 104 and 106. Schedules E and SSA are not part of the annual report filed under Title I of ERISA, and are not open to public inspection.

Changes To Note for 2002

• IRS Notice 2002-24 suspended the filing requirement imposed on fringe benefit plans by Code section 6039D. As a result, lines 8c and 10c on the Form 5500, Schedule F, and filing instructions for fringe benefit plans were removed for 2002. Welfare plan filing requirements remain unchanged. See Welfare Benefit Plan on page 3 for more information.
• The Section 4: How To File instructions emphasize that Social Security numbers should not be entered on the Form 5500 or attachments unless specifically required.
• The Other Penalties instructions on page 7 reflect the increased criminal penalties for violations of Part 1 of Title I of ERISA.
• Form 5500 - Line 2d codes for principal business activity are revised on pages 59, 60 and 61.
• Form 5500 - Lines 8a and 8b plan characteristics codes are modified on pages 17 and 18 to include: 1l for a frozen plan, 1D for a floor-offset plan, and 4T for a 10 or more employer plan under Code section 419A(f)(6).
• Schedule B - Line G is enlarged to permit an additional digit for the enrollment number.
• Schedule B - Lines 12r, 12s, 12t, 13, and 14 are deleted and lines 12p and 12q are restructured due to the phasing out of the Optional Rule under Code section 412(l)(3)(E) and the Transition Rule of Code section 412(l)(11) and ERISA section 302(d)(11).
• Schedule E - New lines include 16a through 16c, for elections under Code section 404(k)(2)(A)(iii), and 17a through 17e, concerning ESOPs maintained by S corporations. Former line 16 is now renumbered line 18.
• Schedule H - The headings for lines 1 and 2 clarify the lines that DFEs should not complete.
• Schedule H and Schedule I - Line 4a, concerning delinquent participant contributions, now includes information about the DOL Voluntary Fiduciary Correction Program (VFCP).
• Schedule R - Line 8 is deleted and line 9 renumbered as line 8 due to the phasing out of the Transition Rule of Code section 412(I)(11) and ERISA section 302(d)(11).
• Schedule SSA - Multiple schedules, if necessary, must be submitted to report the required information. See the Instructions for Schedule SSA (Form 5500) on page 53.

Telephone Assistance

If you need assistance completing this form, want to confirm the receipt of forms you submitted, or have related questions, call the EFAST Help Line at 1-866-463-3278 (toll-free) and follow the directions as prompted. The EFAST Help Line is available Monday through Friday from 8:00 am to 8:00 pm, Eastern Time.

How To Get Forms and Related Publications

By Phone and in Person

You can order forms and IRS publications 24 hours a day, 7 days a week, by calling 1-800-TAX-FORM (1-800-829-3676). You can order PWBA publications by calling 1-800-998-7542. In addition, most IRS forms and publications are available at your local IRS office.

Personal Computer

You can access the EFAST Web Site 24 hours a day, 7 days a week at www.efast.dol.gov to:

• View forms and related instructions.
• Get information regarding EFAST, including approved software vendors.
• See answers to frequently asked questions about the Form 5500 and EFAST.
• Access the main PWBA and DOL Web Sites for news, regulations, and publications.

You can access the IRS Web Site 24 hours a day, 7 days a week at www.irs.gov to:

• View forms, instructions, and publications.
• See answers to frequently asked tax questions.
• Search publications on-line by topic or keyword.
• Send comments or request help by e-mail.
• Sign up to receive local and national tax news by e-mail.

Section 1: Who Must File

A return/report must be filed every year for every pension benefit plan, welfare benefit plan, and for every entity that files as a Direct Filing Entity as specified below (Code section 6058 and ERISA sections 104 and 4065).

Pension Benefit Plan

All pension benefit plans covered by ERISA are required to file a Form 5500 except as provided in this Who Must File section. The return/report is due whether or not the plan is qualified and even if benefits no longer accrue, contributions were not made this plan year, or contributions are no longer made. Pension benefit plans required to file include both defined benefit plans and defined contribution plans.

The following are among the pension benefit plans for which a return/report must be filed:

1. Profit-sharing, stock bonus, money purchase, 401(k) plans, etc.
2. Annuity arrangements under Code section 403(b)(1).
3. Custodial accounts established under Code section 403(b)(7) for regulated investment company stock.
4. Individual retirement accounts (IRAs) established by an employer under Code section 408(c).
5. Pension benefit plans maintained outside the United States primarily for nonresident aliens if the employer who maintains the plan is:
   • a domestic employer, or
   • a foreign employer with income derived from sources within the United States (including foreign subsidiaries of domestic employers) if contributions to the plan are deducted on its U.S. income tax return. For this type of plan, enter 3A on Form 5500, Part II, line 8a.
6. Church pension plans electing coverage under Code section 410(d).
7. Pension benefit plans that cover residents of Puerto Rico, the U.S. Virgin Islands, Guam, Wake Island, or American Samoa. This includes a plan that elects to have the provisions of section 1022(i)(2) of ERISA apply.
8. Plans that satisfy the Actual Deferral Percentage requirements of Code section 401(k)(3)(A)(ii) by adopting the "SIMPLE" provisions of section 401(k)(11).

See What To File on page 7 for more information about what must be completed for pension plans.

Special Rules for Certain Plans of Partnerships and Wholly Owned Trades or Businesses

A plan that provides deferred compensation solely for (1) an individual or an individual and his or her spouse who wholly own a trade or business, whether incorporated or unincorporated; or (2) partners or the partners and the partners' spouses in a partnership may generally file Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan, rather than a Form 5500, provided that the plan:

1. Satisfies the minimum coverage requirements of Code section 410(b) without being combined with any other plan maintained by the employer;
2. Does not cover a business that is a member of a "controlled group"; and
3. Does not cover a business for which leased employees (as defined in Code section 414(n)(2)) perform services.

A plan that fails to meet any of the above conditions must file Form 5500 rather than Form 5500-EZ. A plan that meets all of the above conditions is exempt from filing the Form 5500-EZ if the plan (and any other plans of the employer) had total assets of $100,000 or less at the end of every plan year beginning on or after January 1, 1994.

For this purpose, a "controlled group" is a controlled group of corporations under Code section 414(b), a group of trades or businesses under common control under Code section 414(c), or an affiliated service group under Code section 414(m) that includes the business of the owner or partner covered by the plan.

When filing Form 5500 for a plan described in Special Rules for Certain Plans of Partnerships and Wholly Owned Trades or Businesses, enter code 3G on Part II, line 8a.

Do Not File A Form 5500 For A Pension Benefit Plan That Is Any Of The Following:

1. An unfunded excess benefit plan. See ERISA section 4(b)(5).
2. An annuity or custodial account arrangement under Code section 403(b)(1) or (7) not established or maintained by an employer as described in DOL Regulation 29 CFR 2510.3-2(f).
3. A Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) that involves SIMPLE IRAs under Code section 408(p).
4. A simplified employee pension (SEP) or a salary reduction SEP described in Code section 408(k) that conforms to the alternative method of compliance in 29 CFR 2520.104-48 or 2520.104-49.
5. A church plan not electing coverage under Code section 410(d).
6. A pension plan that is a qualified foreign plan within the meaning of Code section 404A(e) that does not qualify for the treatment provided in Code section 402(e)(5).
7. An unfunded pension plan for a select group of management or highly compensated employees that meets the requirements of 29 CFR 2520.104-23, including timely filing of a registration statement with the DOL.
8. An unfunded dues financed pension benefit plan that meets the alternative method of compliance provided by 29 CFR 2520.104-27.
9. An individual retirement account or annuity not considered a pension plan under 29 CFR 2510.3-2(d).
10. A governmental plan.

Welfare Benefit Plan

All welfare benefit plans covered by ERISA are required to file a Form 5500 except as provided in this Who Must File section. Welfare benefit plans provide benefits such as medical, dental, life insurance, apprenticeship and training, scholarship funds, severance pay, disability, etc.

See What To File on page 7 for more information.

Reminder:   The administrator of an employee welfare benefit plan that provides benefits wholly or partially through a Multiple Employer Welfare Arrangement (MEWA) as defined in ERISA section 3(40) must file a Form 5500, unless otherwise exempt.

IRS Notice 2002-24 does not suspend the filing of Form 5500 or any required schedules for a welfare plan subject to Title I of ERISA. Welfare plans that are associated with fringe benefit plans must file the Form 5500 in accordance with the Welfare Benefit Plan Filing Requirements on page 9, unless they are exempt as specified below. Welfare plans for which a Form 5500 must be filed may be eligible for limited filing requirements. See the limited reporting requirements for unfunded, fully insured or combination unfunded/insured welfare plans on page 9.

Do Not File A Form 5500 For A Welfare Benefit Plan That is Any Of The Following:

1. A welfare benefit plan that covered fewer than 100 participants as of the beginning of the plan year and is unfunded, fully insured, or a combination of insured and unfunded.
   1. An unfunded welfare benefit plan has its benefits paid as needed directly from the general assets of the employer or employee organization that sponsors the plan.

      Note.   Plans that are NOT unfunded include those plans that received employee (or former employee) contributions during the plan year and/or used a trust or separately maintained fund (including a Code section 501(c)(9) trust) to hold plan assets or act as a conduit for the transfer of plan assets during the year. However, a welfare plan with employee contributions that is associated with a fringe benefit plan under Code section 125 may be treated for annual reporting purposes as an unfunded welfare plan if it meets the requirements of DOL Technical Release 92-01, 57 Fed. Reg. 23272 (June 2, 1992) and 58 Fed. Reg. 45359 (August 27, 1993).

   2. A fully insured welfare benefit plan has its benefits provided exclusively through insurance contracts or policies, the premiums of which must be paid directly to the insurance carrier by the employer or employee organization from its general assets or partly from its general assets and partly from contributions by its employees or members (which the employer or employee organization forwards within 3 months of receipt). The insurance contracts or policies discussed above must be issued by an insurance company or similar organization (such as Blue Cross, Blue Shield or a health maintenance organization) that is qualified to do business in any state.
   3. A combination unfunded/insured welfare plan has its benefits provided partially as an unfunded plan and partially as a fully insured plan. An example of such a plan is a welfare benefit plan that provides medical benefits as in a above and life insurance benefits as in b above.

      See 29 CFR 2520.104-20.

      Note.   A "voluntary employees' beneficiary association," as used in Code section 501(c)(9) ("VEBA"), should not be confused with the employer or employee organization that sponsors the plan. See ERISA section 3(4).

2. A welfare benefit plan maintained outside the United States primarily for persons substantially all of whom are nonresident aliens.
3. A governmental plan.
4. An unfunded or insured welfare plan for a select group of management or highly compensated employees which meets the requirements of 29 CFR 2520.104-24.
5. An employee benefit plan maintained only to comply with workers' compensation, unemployment compensation, or disability insurance laws.
6. A welfare benefit plan that participates in a group insurance arrangement that files a Form 5500 on behalf of the welfare benefit plan as specified in 29 CFR 2520.103-2. See 29 CFR 2520.104-43.
7. An apprenticeship or training plan meeting all of the conditions specified in 29 CFR 2520.104-22.
8. An unfunded dues financed welfare benefit plan exempted by 29 CFR 2520.104-26.
9. A church plan under ERISA section 3(33).
10. A welfare benefit plan solely for
    1. an individual or an individual and his or her spouse, who wholly owns a trade or business, whether incorporated or unincorporated, or
    2. partners or the partners and the partners' spouses in a partnership. See 29 CFR 2510.3-3(b).

Direct Filing Entity (DFE)

Some plans participate in certain trusts, accounts, and other investment arrangements that file the Form 5500 as a DFE in accordance with the Direct Filing Entity (DFE) Filing Requirements on page 9. A Form 5500 must be filed for a master trust investment account (MTIA). A Form 5500 is not required but may be filed for a common/collective trust (CCT), pooled separate account (PSA), 103-12 investment entity (103-12 IE), or group insurance arrangement (GIA). However, plans that participate in CCTs, PSAs, 103-12 IEs, or GIAs that file as DFEs generally are eligible for certain annual reporting relief. For reporting purposes, a CCT, PSA, 103-12 IE, or GIA is not considered a DFE unless a Form 5500 and all required attachments are filed for it in accordance with the Direct Filing Entity (DFE) Filing Requirements.

Note.   Special requirements also apply to Schedules D and H attached to the Form 5500 filed by plans participating in MTIAs, CCTs, PSAs, and 103-12 IEs. See the instructions for these schedules.

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