401(k): New Form 5500-SUP

On March 31, 2015, the IRS released an updated draft of Form 5500-SUP which may be required of qualified plans with plan years starting on or after January 1, 2015.

Supplemental information that is being requested on the new 5500-SUP includes:

1. Whether the plan is a section 401(k) plan or not
2. How are discrimination requirements satisfied? Safe harbor method or ADP/ACP testing.
3. If ADP/ACP testing is used, did the plan perform testing for the plan year using the “current year testing method” for non-highly compensated employees?
4. What method did the plan use to satisfy coverage requirements under section 410(b): ratio percentage test or average benefit test and does the plan satisfy the coverage and nondiscrimination tests of sections 410(b) and 401(a)(4) by combining the plan with any other plans under the permissive aggregation rules?
5. Has the plan been timely amended for all required tax law changes?
6. Date the last plan amendment/restatement for the required tax law changes was adopted
7. What is the date of the plans last favorable determination letter?
8. Is the plan maintained in US territory?
9. Did the plan trust incur unrelated business taxable income? If so, what amount?
10. Were in-service distributions made during the plan year? If yes, what amount?

Per the IRS:

Form 5500-SUP, Annual Return of Employee Benefit Plan Supplemental Information, is the paper-only form the IRS intends to issue to supplement the Form 5500 and Form 5500-SF for 2015 and later plan years. Plan administrators and plan sponsors (in certain situations) may use the Form 5500-SUP if they’re exempt from the mandatory IRS electronic filing regulation and don’t choose to electronically answer the “IRS compliance” questions on Forms 5500 and 5500-SF through the EFAST2 system.

The IRS anticipates that the Form 5500-SUP will contain the same IRS compliance questions that the IRS intends to add to the Form 5500 and the Form 5500-SF. The Form 5500-SUP will give filers who are not required to file electronically the option to answer these questions on paper.

The Form 5500-SUP may be used by plan administrator or plan sponsors who:

1. are required to file Form 5500 or Form 5500-SF;
2. file fewer than 250 tax returns of any type, including information returns, during the calendar year that includes the first day of the plan year; and
3. choose not to answer the IRS compliance questions electronically through the EFAST2 system.