Audit or No Audit | Did You File Form 5500 on Time?
Published on by Brad Sack in Benefit Plan Audits
You likely had filed your Form 5500 for your employee benefit plan prior to its October 15 due date. If you delayed filing because the plan’s financial statement audit was not yet complete, the Department of Labor (DOL) advises that you reconsider.
Employee benefit plans that are considered “large plans” are required to have a financial statement audit performed for the plan for that year to attach as part of its annual Form 5500 filing requirement. Ideally, you would have filed Form 5500 with the audit report prior to the form’s October 15 due date. However, if you were unaware that you needed an audit, or if the audit was not complete by October 15, the DOL requests that you still file Form 5500 without the audit report with the intent of later filing an amended Form 5500 that includes the audit report.
Yes, the initial filing without the audit will be considered deficient, and you will likely receive a letter from the DOL that requires a response, however, the penalties will likely be substantially less than if you had filed Form 5500 late without the audit, or not at all.
This direction comes from Michael Auerbach, chief accountant with the DOL’s Employee Benefits Security Administration, as part of the AICPA’s 2024 webcast for Employee Benefit Plan Audit Quality Center Designated Audit Quality Partners.
“The DOL’s position is that you file Form 5500 timely, even if it is deficient, and then go back and amend the filing when you have the missing information ready to put in,” says Auerbach.
Auerbach shared that the DOL has an enforcement initiative underway to identify plans that didn’t file and that there are likely some surprised plan administrators who have received substantial proposed penalty amounts because they didn’t file at all instead of filing Form 5500 without the audit report.
Additional Resources
You might be interested in our 2024 Benefit Plan 401(k) Benchmarking Report where we surveyed and compiled responses on multiple topics, including plan size, success and success factors, operations and management, and satisfaction (both employer and employee). Or check out this recent post covering Pension-Linked Emergency Savings Accounts.
As always, If you have questions about any of the material covered above, or would like to discuss how to get the most out of your plan, our employee benefit plan team works with more than 150 plan administrators. Contact us for a free consultation. We’re here to help.
