Annual Plan Year Reporting and IRS 5500 Filing

What’s the Plan Year End process like? Is it every year and can you explain each of the steps in detail?

No problem! Read on. During your first year as a 401(k) Plan administrator, you might find yourself asking questions as to the timeline of events. The plan year has ended but what’s the order of operations look like for filing the annual Form 5500 (pronounced fifty-five hundred). The walkthrough below was meant to breakdown the timeline in an easy to understand way, while giving you an idea of what to expect after the end of your first plan year

Much like federal taxes, there’s a late filing penalty if the Form 5500 is filed after the deadline. Here’s a list of the documents we can collect to prevent this occurrence:

Much like the fiscal year, each 401(k) Plan has an annual report created to reflect its actions. Once your plan year ends, after the necessary documents are collected to document the year and the Form 5500 is submitted . The  applicable nondiscrimination testing is performed afterward.

Immediately following the end of your plan year, selected document collection can begin. A questionnaire regarding the plan’s actions and a log of employee data can be submitted via the Guidant client portal at this time. Other documents like corporate financial statements or investment statements (if applicable) will depend on your CPA or financial advisors. To stay on top of the process, it’s best to request the required statements when the plan year ends to avoid delays.

Is your 401(k) Plan bank account currently open? Do you have participant directed investment style accounts (IM Accounts) open so your employees can participate in the plan? This requires the submission of monthly account statements for the duration of your plan year.

Once all required documents are submitted, the file will be forwarded to a recordkeeper to either produce the Safe Harbor Matching Contribution (if applicable; learn more about Safe Harbor here) or to perform the applicable nondiscrimination testing (if your plan doesn’t have a required match, learn more here). The duration of this process will be dependent on the accuracy of the completed forms and the possibility of additional information being sought. To reduce the probability of a delay, schedule a document submission walkthrough.

After the file has been prepared, our internal compliance department will review the information and results for accuracy.

Lastly, your completed annual Form 5500 will be published to a secure website. You can login to this site at any time after your first eFiling to print or save copies of any previous report. Once the report is available for your electronic signature, a representative can walk you through the process to make sure the report is submitted to the regulating authorities correctly. Looking to eFile after hours? You can view or download a copy of walkthrough via this link.

Because the process is thoroughly detailed, utilizing Guidant Financial as your 401(k) Plan recordkeeper is imperative in making sure your plan compliance is maintained year over year. The process is dependent on how quickly accurate documentation can be submitted, so we’re happy to offer discounts on your recordkeeping services for an early completion of this process.

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