MID-DECEMBER 2009 Pension Plan tip of the month…..

2009 Form 5500 and Required Electronic Filing

The Trustee(s) of the Plan will need to review the information contained in this Tip. Please forward to the appropriate Plan trustee(s) if you are not acting in that capacity.

The Department of Labor (DOL), beginning with the 2009 plan year, will require retirement plans to file Form 5500 electronically through a system called EFAST2. Due to this change from paper filing to electronic filing, there will be significant changes in the procedures for Plan Sponsors and The Paragon Alliance Group, LLC. The EFAST2 system is effective for plan years beginning on or after January 1, 2009. Employers with a 12/31/09 plan year will be the first to file electronically through this new system.

Paragon continues to review the procedures that will be required during the actual submission process of the completed Form 5500; however, we would like to provide you some basic details of the procedures so that you have an idea of what to expect.

We have contracted with a third party software company to assist our clients in the submission process. This system is user-friendly and will allow for the efficient transmission of your Form 5500.

Beginning January 1, 2010, the Form 5500 authorized signer will need to access the EFAST2 web site at www.efast.dol.gov, to complete a form that will establish Filing Signer authority. The DOL defines an authorized signer as the Plan Administrator, Employer, and/or Plan Sponsor. For most plans, one of the Trustees would be the authorized signer. The form is called IREG (Internet Registration) and each authorized signer will be assigned a unique User ID and PIN. The DOL has provided strict guidance that this User ID and PIN cannot be shared with another party.

Even though the Form 5500 will be submitted electronically, it does not mean that the process is completely paperless. A fully signed copy of the return must be maintained in your files for a minimum of seven years. Also, the Schedule SSA is not included in the electronic filing of the Form 5500 because it contains social security numbers. You will continue to mail this schedule to the IRS.

After The Paragon Alliance Group has completed your compliance testing and updated your 2009 Form 5500, you will receive an email from us indicating that your Form 5500 has been posted to the secure website provided by our third party software company. You will receive a User ID and PIN to log into this website to view your Form 5500. You will also have the ability to print the Form 5500.

If your retirement plan does not require a plan audit, after your review of the Form 5500, the plan trustees will be able to initiate a signing ceremony and submit the Form 5500 using the User ID and PIN provided when the IREG form is completed. If your plan does require a plan audit, the Form 5500 can be made available to your plan auditor, or a printed copy can be sent to them. After the audit is complete, we will need to upload the Financial Statement and their Opinion to the secure website. These documents must be attached to the Form 5500 submission before a signing ceremony can be initiated.

Your Account Executive will be able available to answer your questions and assist you through this new required process.