Generally, all organizations that offer employee retirement and welfare benefit plans are required to file a Form 5500 each year. There will be significant changes to filing procedures for 2009, including the requirement to report both direct and indirect fees and to file electronically instead of by mail.

To answer questions on Form 5500 preparation, we have asked our expert, Linda Fisher, Delivery Group Manager for Hewitt's Form 5500 and Financial Statement and Audit Preparation Enhanced Share Service, to respond to the latest developments in this area. If you'd like to ask a question about Form 5500 preparation, or about any other pressing human resources challenge you might be facing, e-mail us. We'll share responses to select questions on a regular basis.

Question: Do the new electronic requirements specify that separate individuals are authorized as Form 5500 preparers, signers, authorizers, etc.?

Answer: Yes. A person needs to sign up based on his or her responsibilities to the filing. You must choose at least one user type but many choose more than one:

• Filing author: initiates the filing and will submit it; no signature authority.
• Filing signer: has signature authority only.
• Schedule author: someone who has been asked to complete one of the schedules; cannot initiate, sign, or submit a filing.
• Transmitter: applying to transmit filing.
• Third-party software developer.

Question: Is there a minimum dollar value of non-cash gifts, awards, etc. for reporting purposes?

Answer: Yes. If a single non-cash gift is valued at less than $50 it is not required to be reported. Reporting is required if more than $100 of non-cash gifts are provided to a single source over a year. Gifts with a value of less than $10 do not need to be counted toward the $100 limit.

Question: Do you report reimbursement to salaried employees of companies that administer the plan? If yes, what about benefits to that person? Are these reimbursable, and, if so, how is this calculated?

Answer: Yes, you would need to report the salary (or portion thereof) and benefits of an employee who performed plan administration for the plan sponsor if these expenses were charged to the plan. This would be reported as compensation paid to the plan sponsor.

Question: Do we need to report fees associated with a Self-Directed Brokerage Window Account?

Answer: Yes.

Question: On Schedule C, is it required that accrued expenses for the filing plan year be reported along with actual disbursed payments?

Answer: Yes, if you are reporting expenses on an accrual basis.

Question: How do the new Schedule C fee disclosures affect limited partnership and alternative investment transactions?

Answer: Any fee-related information paid by the plan and/or its participants — whether direct or indirect (transaction-based) — must be reported. Direct fees require the recipient of the fee and the fee amount to be reported. Eligible indirect fees require the recipient to be reported but the fee dollar amount does not need to be reported. Recipient and amount must be reported for ineligible indirect fees.

Question: If you pay investment advisory fees to the 401(k) from forfeitures, how is it reported?

Answer: If the investment advisory fees are paid directly from the trust and reported within the trust statements as paid to that specific investment manager, then they would be reported as direct fees. If the investment manager fees are based on transactions (e.g., commissions, finder fees, trading fees) then they would be reported as indirect fees.

About Our Expert
Linda Fisher is Delivery Group Manager for Hewitt's Compliance Government Filing Services Unit and has worked with Form 5500 filings and financial statement audit preparation for the past 14 years. She also serves as a primary Form 5500 resource within Hewitt and works closely with clients to help manage their benefit plans, government reporting, and disclosure requirements. In addition, Linda has served as a keynote speaker for Form 5500 filing requirements at conferences across the country. Before joining Hewitt, Linda spent five years managing payroll and benefit accounting departments. Linda earned her M.B.A from Drexel University and a B.S. in Finance from the University of Minnesota.