Data Consolidation Aid for Form 5500

As sponsors of retirement and welfare plans face a new requirement this year to file Form 5500 reports electronically, Principal Financial Group has rolled out online tools to help companies with the task.

Organizations with retirement and welfare plans governed by ERISA must file Form 5500s detailing the plans' finances and operations every year, and the Department of Labor is now requiring that all sponsors file electronically using a new system, ERISA Filing Acceptance System II (EFAST2).

Aaron Friedman, national practice leader for retirement and investor services at Des Moines, Iowa-based Principal, says that Principal already provided e-filing services to its clients, but it typically filled in available data first, then passed the form along to the plan's auditor or the company to add any missing information.

Coordination is needed with electronic filing, Friedman says. "And our data collection tool provides the ability to do that." The tool is integrated with Principal's recordkeeping system and "provides a very user-friendly kind of data collection for the plan sponsor and the auditor to go through," he says.

The Department of Labor is also asking plan sponsors to provide more details about their plan's fees on Schedule C of Form 5500. To give companies a hand with that requirement, Principal now has a consolidated disclosure tool. "This tool collects all the different sorts of fees, direct and indirect, and sets it out for the sponsor to see," Friedman says.

Friedman notes that feedback from clients has been positive, with a Principal survey finding that 87% of clients described the tools as easy or very easy to use.

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