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EFAST2 Questions and Answers

Beginning with the 2009 plan year, the Department of Labor (DOL) will require retirement and welfare plans to file their annual reports (Form 5500) electronically (EFAST2). The transformation from paper filing to electronic filing will result in significant changes in procedures. To ease the transition, preparers need to familiarize themselves with the new electronic filing system. The following FAQs address how the DOL will implement EFAST2.

When is the mandatory electronic filing system (EFAST2) effective?
The EFAST 2 is effective for plan years beginning on or after January 1, 2009. Plans will be able to commence filing electronically on January 1, 2010. Any plan which has a 5500 due before January 1, 2010 will have an automatic extension until 90 days following the date on which the Form 5500 is available for filing electronically. That date would be March 31, 2010, unless the DOL changes the date on which electronic filing will be available.

Must all retirement plans file electronically?
With the exception of a plan covering the sole owner (and his/her spouse) or partners in a partnership (and their spouses) and no employees (“owner only plan"), all plans, including retirement, welfare and 403(b) plans, will need to file their 5500s electronically. Owner only plans will file a paper copy of the 5500-EZ with the IRS. However, owner only plans which do not hold employer stock may elect to file a Form 5500-SF (short form) electronically with the DOL.

How does a plan sponsor obtain electronic signature credentials?
The plan sponsor will go to a DOL website (IREG) and enter certain personal information. The plan sponsor then will receive an email with a link to a website where you will receive the credentials (signer ID and PIN code). The credentials are personal to the individual obtaining the credentials. If a plan sponsor may have different company officers signing the 5500, each officer would need to obtain his/her own credentials.

May a TPA or financial institution obtain signer credentials on behalf of its clients?
No. Every individual who signs a 5500 or schedule must obtain his/her own signature. Furthermore, the government limits one set of credentials per email address. When an individual obtains his/her signer credentials, the individual must certify to the government that he/she will not share the credentials with anyone, including a TPA or financial institution.

How do I use the electronic signature credentials in filing a Form 5500 electronically?
If the plan sponsor is completing its own filing, the plan sponsor will enter the electronic signature (signer ID and the PIN code) in the appropriate place on the 5500. Under a web-based system, the preparer will invite the plan sponsor to an electronic signing ceremony where an authorized representative (e.g., officer) of the plan sponsor will enter his/her credentials.

Paper 5500 Option No Longer Available for 2009

In our continuing series of FAQs on EFAST2, we are addressing the issues and procedures with which 5500 preparers and plan sponsors will need to familiarize themselves to make the transition to electronic filing. Recently, we were contacted by the DOL and informed that some preparers were continuing to file paper copies of the Form 5500 for short 2009 plan years. The DOL also informed us that preparers were continuing to contact the EFAST Contact Center attempting to obtain permission to file copies of the form 5500. With the exception of 2008 plan years, the option of filing paper copies of the Form 5500 has expired. The DOL expects plan sponsors now to file electronically under EFAST2. In this technical update, we address the questions regarding the paper option for filing a Form 5500.

May a 5500 preparer still use the paper Form 5500 to file a short 2009 plan year filing?
No. For ERISA plans with plan years beginning after December 31, 2008, electronic filing under EFAST2 is the only option. There was a limited exception: a plan with a short 2009 plan year that had a filing deadline before January 1, 2010 was able to file a paper copy of the Form 5500 (using 2008 forms) before January 1, 2010. Since that deadline has expired, the DOL no longer will accept a paper filing of a 2009 Form 5500.

What action will the DOL take if preparer files a paper Form 5500 for a short 2009 plan year after December 31, 2009?
The DOL will return the filing to the plan sponsor. The paper filing is not a filing. The plan sponsor will not satisfy its obligation to file Form 5500 until the sponsor properly files electronically under EFAST2. Note: We have spoken to DOL officials several times and they have informed us that they will return filings for short 2009 plan years that are postmarked after December 31, 2009.

Could a plan sponsor of a plan with short 2009 plan year and a filing deadline before January 1, 2010 obtain a filing extension and file a paper copy of the Form 5500 after December 31, 2009?
No. The ability to file paper copy of the Form 5500 for a 2009 plan year has expired on December 31, 2009. Such a plan would need to file electronically under EFAST2.

May a plan sponsor of a plan with a short 2009 plan year that has a deadline after December 31, 2009 contact the EFAST Contact Center to obtain permission to file a paper version of the Form 5500?
No. The ability to obtain such permission ended on December 31, 2009. The DOL had informally indicated that a plan with a short plan year ending after May 31, 2009 (and hence a filing deadline after December 31, 2009), while normally subject to EFAST2 filing requirements, could call the EFAST Contact Center and obtain permission to file a paper copy of the Form 5500. However, the DOL will no longer accept paper versions of the Form 5500 for a 2009 filing regardless of its deadline.

May a plan sponsor file a 2008 plan year Form 5500 with paper forms?
Yes. A plan sponsor may file a normal, delinquent or amended 2008 Form 5500 filing with the DOL at its Lawrence, KS office through October 15, 2010. The plan sponsor also may file a 2008 Form 5500 electronically under EFAST (sometimes referred to as EFAST1) through June 30, 2010. The sponsor may also file 2008 returns electronically under EFAST2.

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