Compliance News | July 6, 2022

Form 5500 for 2022 Requires More Retirement Plan Information

The DOL, IRS and PBGC (the ERISA agencies) made several changes to the Form 5500 that plans must file for plan years beginning on or after January 1, 2022.

The changes are quite specific and technical. Most affect the actuarial schedules and attachments for multiemployer DB plans and single-employer DB plans. Consequently, plan sponsors should consider discussing the changes with their actuary.

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Most previously proposed changes to multiple-employer DC plans will be considered for the Form 5500 for 2023.

Background

The ERISA agencies collect data and information on retirement plans on a combined Form 5500 that’s filed with the DOL through the E-Fast2 system. There is a long lead time before changes to the form can be implemented because the E-Fast2 system must be reprogrammed.

The 2022 Form 5500 changes were proposed on September 15, 2021 and generated numerous comments. Because of the deadline for reprogramming E-Fast2, the ERISA agencies only adopted a limited number of the proposed changes, which were announced in the May 23, 2022 Federal Register. The remainder will be considered for 2023.

Changes for multiemployer DB plans

These changes in Schedule MB (Multiemployer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information) are intended to provide the PBGC with more information on multiemployer DB plans:

  • Break down withdrawal liability payments between lump-sum amounts and those that are part of a schedule of periodic payments.
  • Clarifying instructions when plans in critical status or critical and declining status are projected to either emerge from that status or become insolvent.
  • Report the interest assumption used to determine the present value of vested benefits for withdrawal liability determinations.
  • Report expense loads in a manner that better aligns with how the plan incorporates them into its calculations.
  • For plans with 1,000 or more total participants, provide a 50-year projection of benefit payments (broken down among active, terminated vested and pay status participants) and a 10-year projection of contributions.
  • For plans with 1,000 or more active participants, provide a modified age/service scatter diagram to include average accrued monthly benefits.
  • Allow certain heavily numeric attachments to be in a spreadsheet file (comma-separated values (CSV) format).

On Schedule R (Retirement Plan Information), multiemployer DB plans must identify any employer that was one of the top 10 highest contributors. This is in addition to the current reporting of those contributing more than 5 percent of the plan’s total contributions.

Schedule SB changes for single-employer DB plans

Single-employer DB plans with 1,000 of more participants must provide a 50-year benefit payment projection broken down into three categories based on the participant’s or beneficiary’s status on the valuation date (i.e., active, terminated vested or in pay status).

Additionally, reporting regarding the plan sponsor’s elections under the Pension Relief Act of 2010 will be replaced with reporting regarding the plan sponsor’s elections to apply the amortization relief under the American Rescue Plan Act of 2021. (We discussed that relief in our March 1, 2021 insight.)

Like multiemployer plans, single-employer plans are allowed to provide certain heavily numeric attachments in a spreadsheet file, such as a CSV format.

Multiple-employer DC plans

The ERISA agencies reserved decision on most of the proposed changes for multiple-employer DC plans. However, they did add new plan characteristics codes to identify different types of multiple-employer plans. They also clarified which entities should report as plan sponsors and which as plan administrators.

Action item

As noted above, plan sponsors should consider discussing the changes to Form 5500 and any implications for data collection with their actuary.

Have questions about the Form 5500 changes for 2022?

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

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