News and Commentary

Upcoming Deadline, New Audit Requirements for Certain Employer Benefit Plan Sponsors By Olga Ismail

Businesses that offer their workers access to 401(k) retirement plans and similar defined-contribution plans have a July 31, 2022, deadline to file IRS Form 5500, reporting the details of their plan’s financial assets, its sources of funding, administrative expenses, number of active participants and benefits paid out to participants. Smaller plans with fewer than 100 participants at the beginning of the plan year must file Form 5500-SF, while foreign plans and single-member plans for business owners/partners and their spouses must annually file Form 5500-EZ.
For 2022, plans with 100 or more qualifying participants completing Form 5500 will find a new question relating to 401(k) pooled retirement plans under the 2019 Setting Every Community Up for Retirement Enhancement (SECURE) Act. They will also find limited-scope audits replaced by more transparent ERISA section 103(a)(3)(C) audits, which will require they accept a broader range of responsibilities over their plans financial reporting and management of risks.

Corporate Retirement Plans with 100 or more qualifying participants that fail to meet their annual information-reporting deadline or request a two-and-a-half-month filing extension could be subject to IRS penalties of $250 per day, up to a maximum of $150,000 plus interest, as well as Department of Labor fines and penalties of up to $2,259 per day with no maximum.

Benefit plan sponsors that miss the July 31 filing deadline (and the October 15 filing extension) may apply for reduced penalties under the Department of Labor’s Delinquent Voluntary Filer Voluntary Compliance Program (DFVCP). A similar penalty relief program exists for one-participant plans that cover a 100 percent owner or a partnership and their spouses and who would normally file IRS Form 5500-EZ. In these circumstances, plan sponsors would be responsible for a $500 delinquent filing fee up to $1,500 per submission for the same plan. It is important to note that these penalty relief programs apply only to those plans that voluntarily and proactively submit delinquent returns before receiving any notification from the IRS.

Retirement benefit plan sponsors have a multitude of regulatory reporting requirements that they must meet to ensure compliance and protect plan participants. Helping plan sponsors understand their filing requirements and identify third-party administrators to help them meet these responsibilities is part of PWA’s our consultative approach as Registered Investment Advisors.

About the Author: Olga Ismail is a retirement plan consultant in the Ft. Lauderdale, Fla., office of Provenance Wealth Advisors (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs, and a registered representative with Raymond James Financial Services. For more information, call (954) 712-8888 or email

Provenance Wealth Advisors (PWA), 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.

Olga Ismail is a registered representative of and offers securities through Raymond James Financial Services, Inc., Member FINRA/SIPC. Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors + CPAs. PWA is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of PWA and not necessarily those of Raymond James. You should discuss any tax or legal matters with the appropriate professional. The information contained in this report has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete.

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 July 5, 2022