Form 5500 - out with the old, in with the new.

• Author: Puckett, G. Douglas
• Position: Employee benefits

After several years of effort, the Department of Labor (DOL), the IRS and the Pension Benefit Guaranty Corporation jointly released an all-new Form 5500, Annual Return/Report of Employee Benefit Plan, earlier this year. The new form replaces the old Forms 5500 and 5500C/R, Annual Return/Report for Employee Benefit Plan (With fewer than 100 participants). (Form 5500-EZ, Annual Return/Report for One-Participant (Owners and Their Spouses) Retirement Plan, is still available for one-participant pension plans.) The first pension and welfare benefit plans to file the new form will be those with a 1999 calendar year-end whose returns will be due Oct. 16, 2000 (more on this due date later).

Although the new form and its related schedules request much of the same information required on the old form, much of the form has been reorganized. In addition, the entire format of the Form 5500 return has changed from being a relatively long, six-page form with 33 questions and up to eight schedules as attachments, to a slightly more than two-page form with 10 (sometimes multi-part) questions and up to 13 attached schedules. Every plan required to file a return must complete at least some portion of the new Form 5500; whether any of the various schedules must be attached depends on the type and size of plan involved.

Plans exempt from filing a Form 5500 series return in the past will generally still be exempt under the new reporting requirements. A list of the current filing exemptions is included on pages three and four of the revised Form 5500 instructions.

Changes in Filing Procedures

Scannable forms. With the switch to the new format, only computer-scannable versions of Form 5500 and the related schedules will be accepted for filing. As a result, there are two options for preparing a return. If data on the form is entered by hand or with a typewriter, the preparer must use an original copy of the form printed on special paper with green ink; photocopies will not be accepted. A sample of this special version of the form is in the 1999 Form 5500 package, mailed to most plan sponsors in late February. In addition, preparers can order extra copies from the Service by calling (800) 829-3676.

The second option is to use tax preparation software. The computer-prepared forms can then be printed and filed by mail or, with the right software, filed electronically. (Beginning next year, only a computer-generated return will be accepted, if prepared on software from...