Does your organization offer a retirement or welfare benefit plan to employees?  Understanding the compliance rules and staying on top of deadlines is essential to running your plan smoothly. 

The Employee Retirement Income Security Act of 1974 (ERISA) requires filing Form 5500 to ensure employee benefit plans are operated and managed in accordance with various requirements and to ensure sufficient information is provided or available to participants and regulators to protect the rights and benefits of participants under the plans.

Reporting requirements vary depending on whether your plan qualifies as a “small plan” or “large plan.”  The general rule for determining how your plan should be classified is based on the number of participants covered under the plan, as of the first day of the plan year.  Generally, if your plan covered fewer than 100 participants as of the beginning of the plan year, it will follow the reporting requirements of a small plan, and if it covered 100 or more participants as of the beginning of the plan year, it will follow the reporting requirements of a large plan.  Large plans require an annual audit to accompany the Form 5500 filing, while small plans are exempt from this requirement.


Certain exceptions to the rule are provided to allow plans that typically hover around 100 participants to avoid having to change from small to large, or large to small, filers on an annual basis.  The 80-120 participant rule allows plans to elect to file in the same category (“large” or “small”) as the prior year, if the number of participants at the beginning of the plan year is between 80 and 120.  Accordingly, if your plan filed as a small plan in the prior year and has 120 or fewer participants at the beginning of the current plan year, your plan can file as a small plan in the current year, even if it has passed the 100 participant mark.  After reaching 121 participants, measured at the beginning of the plan year, however, the plan will have to drop under 100 participants again to qualify to file as a small plan.

Determining Total Participants

As the filing requirements are based on the total number of participants at the beginning of the plan year, plan sponsors must understand who qualifies as a participant.  The following employees and individuals are considered participants of the plan:

  • Employees actively participating in the plan
  • Employees eligible to participate in the plan, whether or not participating
  • Employees eligible for benefit under the plan (e.g., former employees with plan balances)

Based on these qualifications, employees who were eligible to participate at the beginning of the plan year, but terminated during the year, are included in the total number of participants, as well as employees who are eligible, but have opted out or who had not yet elected to participate at the beginning of the plan year.  Former employees are included in the total count, if they are receiving benefits or are entitled to a future benefit.


Key Dates

If your plan is going to qualify as a large plan and require an audit, you’ll want to start the process early to ensure key filing deadlines are met.  Key dates include:

  • Filing Deadline – Last day of 7th calendar month after plan year-end
  • Extended Filing Deadline – Additional 2 1/2 months after initial filing deadline (9 1/2 months after year-end)
  • Short Year Filing Deadline– Last day of 7th month after short year end or 9 1/2 months, if extended (any plan year covering less than 12 months is considered a short year)

Questions regarding your plan’s filing requirements, or what the next step is if your plan has hit the large plan filing status? Contact Audit Senior Manager, Susie Bettis.

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