If you sponsor a defined benefit plan and/or defined contribution multi-employer plan, take note! There are a few updates to Form 5500 effective for 2022 plan year reporting (Source: Mercer.com; “Latest Form 5500 Updates”).

Form 5500 is used to report about a plan’s qualification, financial condition, investments, and operation. All defined benefit and defined contribution plan sponsors are required to submit a Form 5500 to the IRS and Department of Labor each year.

If you sponsor your own defined benefit plan (referred to as a single-employer defined benefit plan), actuarial information required is changing. First, any plan insured by the Pension Benefit Guaranty Corporation (PBGC) that has at least 1,000 participants must provide 50 years of projected benefits for active, terminated vested and in-pay status – this must be reported in a separate attachment to line 26. Second, plans must report if you elected the 15-year shortfall amortization relief under the American Rescue Plan of 2021.

For multi-employer defined benefit plans, there are changes to Schedule MB and certain existing requirements.

• Plans that attach reporting withdrawal liability amounts that are part of employer contributions must identify which amounts are periodic and which are lump sum payments.
• For interest rates, plans must report the rate used for employer withdrawal liability assessment or attach a description of the interest rate assumption.
• PBGC-covered plans with at least 500 participants will need to project benefits for a 50-year period for active, terminated vested and in-pay participants; they will also have to provide a 10-year projection of employer contributions and withdrawal liability payments.
• PBGC-covered plans with at least 1,000 active participants must provide average accrued monthly benefits in an age/service scatter.
• In Retirement Plan Information Schedule R, plans must include the 10 participating employers contributing the highest amounts.

For both single and multi-employer plans, reporting can be in the form of a spreadsheet for 50-year expected benefit payment projects and age/service scatter of active participants. The same applies to withdrawal liability amounts and projected employer contributions and withdrawal liability (Schedule MB only).

When it comes to defined contribution multi-employer plans (MEPs), including pooled employer plans (PEPs), there are a couple of changes to Form 5500 and Form 5500-SF instructions, including new plan characteristic codes to identify the type of DC MEP and clarification about who to name as plan sponsor and administrator.

The changes apply to filings for plan years starting January 1, 2022 or later. 2022 plan year filings are generally due seven months after the end of the plan year. So, the 2022 filing must occur by July 31, 2023 for plans that run on a calendar year. (You can file for a 2 ½ month extension with Form 5558.)

Additional changes are expected in the future. For now, if you have any questions or need assistance gathering information for your Form 5500 or Form 5500-SF, let us know. Click here to get in touch with RBT CPAs.

Note: Form 5500 changes are governed by final rules issued by the Internal Revenue Service, Employee Benefits Security Administration, and the Pension Benefit Guaranty Corporation. If there are any conflicts between the information in this article and the official final rules, the official final rules govern.