News and Commentary

Employer-Sponsored Retirement Plans Face Reporting, Audit Criteria Changes this Year By Olga Ismail

In 2023, the U.S. Department of Labor, Internal Revenue Service and Pension Benefit Guaranty Corporation issued final changes to how retirement plan sponsors must annually report critical information about their employee benefit plans under the Secure Act that was passed into law in 2021. These updates apply to employers’ annual reporting obligations for the 2023 tax year, which they file in calendar year 2024.

Businesses that sponsor retirement savings plans generally must file IRS series 5500 forms by July 31 of the year following their defined benefit plan’s year-end. The information they must disclose includes the plan’s financial circumstances, its sources of funding, its administrative expenses, the number of active participants and the benefits paid out to account owners. Plans with fewer than 100 participants at the beginning of the plan year must file Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan. In contrast, single-member plans must file Form 5500-EZ, Annual Return of a One-Participant (Owners/Partners and Their Spouses) Retirement Plan.

One of the more impactful changes that went into effect for 2023 tax-year reporting is a new method plan sponsors may use to determine eligibility for filing simplified Forms 5500-SF for plans with less than 100 participants. Rather than requiring plan sponsors to count the number of employees actively participating in and eligible to participate in their plans, they may instead count only the number of plan participants and beneficiaries with account balances at the beginning of the plan year. With this limit in place, many more 401(k) plans are expected to meet the less than 100 plan participants threshold and qualify to file the simplified and less costly short form 5500.

The retirement plan advisors with Provenance Wealth Advisors have deep experience helping businesses establish 401(k) and 403(b) benefit plans for their employees and helping them meet their various federal filing requirements.

About the Author: Olga Ismail is the head of Retirement Plan Consulting and a financial advisor with Provenance Wealth Advisors (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs and a registered representative with PWA Securities, LLC. She can be reached at the firm’s Fort Lauderdale, Fla., office at (954) 712-8888 or

Provenance Wealth Advisors (PWA), 200 E. Las Olas Blvd., 19th Floor, Ft. Lauderdale, FL 33301 (954) 712-8888.

Olga Ismail is a registered representative of and offers securities through PWA Securities, LLC, Member FINRA/SIPC.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

Any opinions are those of the advisors of PWA and not necessarily those of PWA Securities, LLC. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of PWAS, we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Prior to making any investment decision, please consult with your financial advisor about your individual situation.

401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10 percent federal tax penalty. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Future investment performance cannot be guaranteed. Matching contributions from an employer may be subject to a vesting schedule. Please review your retirement plan documents or consult with a financial professional for more information.

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Posted on May 8, 2024