Recordkeepers and 401(k) plan administrators must provide an excellent experience to plan sponsors and plan participants while staying on top of a successful retirement plan’s many tasks and details. Further, they must keep up with regulatory changes, and the frequently changing compliance requirements can be challenging. Among these responsibilities is the crucial task of accurately filing Form 5500 annually.

Form 5500 filing is an essential annual regulatory requirement that allows the IRS and the Department of Labor (DOL) to assess the status and health of various benefit plans. In addition, it helps them ensure that plan sponsors comply with regulations and protect participants.

To avoid compliance issues for your clients and protect the interests of plan participants, it is vital to file Form 5500 correctly. However, several common errors can occur during the preparation process. In this article, we will examine these common mistakes and explore how outsourcing the preparation of Form 5500 to a specialist partner can bring peace of mind and help you save significantly.

Common Errors in Form 5500 Preparation

There are several pitfalls that recordkeepers and plan administrators can encounter when preparing Form 5500. The following list highlights the most common errors and how to rectify them:

  1. Providing incorrect information– Always double-check the information entered on the form for accuracy.
  2. Leaving a field blank. Fill out all required fields. If a field is not applicable, enter “N/A.”
  3. Noting “zero” plan participants– Ensure the correct number of participants is reported.
  4. Excess deferral– Verify the accuracy of deferral amounts to prevent over-contributing.
  5. Not documenting plan termination– If a plan has ended, submit the appropriate termination forms to the IRS and confirm all required distribution notices have been sent.
  6. Reporting fraud– If suspected fraud or abuse has occurred, report the issue immediately to the DOL or appropriate law enforcement agency.
  7. Non-active plans– Ensure that plans with no activity are accurately reported on Form 5500.
  8. Incorrect entry of the EIN and plan number when filing– Enter the correct Employer Identification Number (EIN) and plan number to prevent processing delays.
  9. Excessive and unnecessary information, such as returns dated over 12 months– Only include relevant information within the specified reporting period.
  10. Not using the prescribed vendors such as EFAST– Use authorized electronic filing systems like EFAST2 to avoid submission errors.

The Benefits of Outsourcing Form 5500 Preparation To a Specialist

Outsourcing the preparation of Form 5500 can help recordkeepers and plan administrators stay on top of their responsibilities while maintaining compliance. By choosing a reliable and specialist third-party partner, you can enjoy the following benefits:

  1. Expertise– Outsourcing to professionals with specialized knowledge of the retirement plan industry will ease Form 5500 filing. In addition, they will ensure accuracy and minimize the risk of errors.
  1. Time-saving– By leaving the  Form 5500 filing process to experts, plan administrators can focus their valuable time on managing and improving their participants’ plans.
  2. Cost-effective– Form 5500 filing is seasonal, so hiring full-time experts for the role will be expensive. Outsourcing the filing process to a third-party provider will help you benefit from their economies of scale and lower costs.
  3. Regulatory compliance– Experienced service providers stay up-to-date on changes in regulations and filing requirements, ensuring your plan remains compliant.
  4. Peace of mind– Outsourcing reduces the risk of fines and legal issues. You can confidently trust that your Form 5500 filings will be submitted accurately and on time.


Filing Form 5500 correctly is critical for maintaining regulatory compliance and safeguarding the interests of plan participants. Outsourcing the preparation process to a specialist partner, recordkeepers, plan administrators, and TPAs can prevent common errors and stay stress-free.

Congruent Solutions is the trusted outsourcing partner for outsourced plan administration for the US Retirement Plan industry. Our experienced retirement industry experts provide comprehensive services to ensure compliance and minimize risks. We are committed to providing accurate, timely filings with detailed documentation of all activities, ensuring your retirement plans remain in good standing. Our trained associates have experience in preparing Form 5500s on leading technology platforms.

Contact us today to learn how we can help you with Form 5500 filing.

Back to Blog Home