Instructions for Form 5500 (2006)

Instructions for Form 5500 - Introductory Material

This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

Under the computerized ERISA Filing Acceptance System (EFAST), you can choose between two computer scannable forms to complete and file your 2006 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.
Hand print and machine print forms generated by EFAST approved software will not be processed if they are printed out blank, or with limited information, and then completed by pen or typewriter. Only official hand print paper forms printed by the IRS may be completed by pen or typewriter.
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.
Filings using photocopies of the computer scannable forms and schedules may be returned or cause correspondence requiring additional information.
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 Employee Benefits Security Administration (EBSA) regarding the processing of your return/report.
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 EBSA either electronically using computer software from EFAST approved vendors or at the EFAST address specified within the instructions. (See Where To File.)
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.
Do not enter social security numbers on the Form 5500, schedules, or other attachments unless specifically required by the form, schedules, or instructions. The Form 5500 and most of the schedules are open to public inspection, and the contents are public information and are subject to publication on the Internet.

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 2, 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 12 and 13 gives a brief guide to the annual return/report requirements for the 2006 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. Employers and plan administrators should 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 7.

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 2006

Form 5500 — The lines 6 and 7 instructions on counting participants and beneficiaries in welfare benefit plans have been expanded to include the definition of when an individual is no longer a participant or beneficiary.
Form 5500 — The instructions have been revised to add the new mail and private delivery service addresses for submitting late filing penalties under the Delinquent Filer Voluntary Compliance Program.
Form 5500 — The instructions covering small and large pension plans, under the Pension Benefit Plan Filing Requirements, have been clarified for attaching the pages of Schedule SSA to Form 5500.
Schedule B — The instructions for lines 1d(2)(a), 1d(2)(c), and 6a have been modified as the Pension Protection Act of 2006 changed the interest rate to be used in calculating a plan's current liability for the 2006 plan year.
Schedule B — The Pension Protection Act of 2006 provides funding relief for certain defined benefit plans (other than multiemployer plans) maintained by a commercial passenger airline or by an employer whose principal business is providing catering services to a commercial passenger airline. Special instructions have been added for this provision allowing eligible plans to be funded using an alternative funding schedule based on 17-year amortization of unfunded liabilities.
Schedules H and I — The TIPs in the instructions for lines 4a and 4d of Schedules H and I have been updated to refer to the revised Voluntary Fiduciary Correction Program (VFCP), which was published in the Federal Register on April 19, 2006. The TIPs also explain that applicants that satisfy both the VFCP requirements and the conditions of Prohibited Transaction Exemption (PTE) 2002-51 are relieved from the obligation to file the Form 5330 with the IRS.
Schedule P — The Internal Revenue Service no longer requires the filing of Schedule P, Annual Return of Fiduciary of Employee Benefit Trust.

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

Telephone

You can order forms and IRS publications by calling 1-800-TAX-FORM (1-800-829-3676). You can order EBSA publications by calling 1-866-444-EBSA (3272).

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 EBSA 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.
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