401(k) plan administrators must ensure their systems are prepared for the updated Form 5500 filing requirements. Your plan must comply with the Internal Revenue Service (IRS) and Department of Labor’s (DOL) regulations for retirement plans.
Inevitably, 2023 brings new challenges with significant updates to how your business manages Form 5500 preparation and filing. These changes include both substantive revisions as well as new reporting requirements.
This article highlights key changes to Form 5500 for 2023 and provides a roadmap for navigating these updates. Updating your systems empowers you to maintain your competitive edge and deliver exceptional client service.
The Department of Labor (DOL) released a few changes and compliance requirements for 2023. Plan administrators must consider adjusting their processes to meet these changes to stay compliant and competitive.
The first significant change for 2023 is the introduction of a consolidated Form 5500 option for Defined Contribution plans. This update aims to simplify the reporting process and reduce the administrative burden for plan administrators managing multiple plans with similar characteristics. As a result, you can use a single form to report information for multiple plans, potentially saving time and resources.
With the growing popularity of PEPs and MEPs, the 2023 Form 5500 changes include enhancements to reporting requirements for these plan types. The new rules are designed to strengthen oversight and supervision of these plans by providing more detailed information on their structures and operations. Adapting to these changes will help you offer better support and transparency to your clients participating in PEPs and MEPs.
In 2023, there will be a shift in how small plans are identified for Form 5500 reporting purposes. By adapting to this new methodology, you can ensure your plan remains compliant with the latest requirements and continues to serve the best interests of plan participants.
Plan administrators will also need to adapt to improvements in reporting by PBGC-covered Defined Benefit plans on Schedules R and SB. These enhancements are designed to provide more precise information on the plan’s fund status and risk exposure. By embracing these changes, your business can deliver a more accurate and transparent reporting process, further setting you apart from the competition.
The 2023 Form 5500 updates include adding Internal Revenue Code compliance questions to enhance tax compliance. As a plan administrator, you must familiarize yourself with these new questions and update your processes accordingly. It will help you prevent costly errors and penalties and demonstrate your commitment to compliance and best practices.
The 2023 Form 5500 changes also include technical adjustments that address changes made by the SECURE 2.0 Act of 2022. As a plan administrator, you must update your systems as it is crucial for remaining compliant and ensuring your services remain competitive.
Adapting to the 2023 Form 5500 changes is essential for 401(k) plan administrators who want to remain competitive. By understanding and embracing these updates, you are ensuring your business remains compliant and showcasing your commitment to providing the best possible services to your clients.
Take advantage of the experience and expertise of professionals at Congruent Solutions. Our team of specialists is adept at preparing Form 5500. So, outsourcing Form 5500 preparation will help you navigate the 2023 Form 5500 changes and ensure your organization is ready to transition smoothly.
Contact our team today to discuss your Form 5500 preparation worries.