Form 5500 OverviewMarch 28, 2012 — 2,132 views
Human resource professionals and their employers should be judicious when offering benefits to workers. Many laws govern how these services should be documented, particularly the Employee Retirement Income Security Act of 1974. Also known as ERISA, this law was intended to regulate how retirement plans were recorded but has since been extended to all kinds of employee benefits.
The most important provision of ERISA requires that all employers submit form 5500 to the Internal Revenue Service along with all standard yearly tax information. One form is required for every employee benefit that the employer is the administrator for and must contain information including the characteristics, financial condition and operations of the plan.
The characteristics basically describe what kind of benefit the plan confers, what services are allowed by the benefit and what conditions cause the benefit to be paid. The financial condition of a plan refers to the ways that funds are contributed to a benefit along with any investments that also play a role in the benefit's maintenance. Operations describe how an employee uses a benefit, where the benefit can be used and what steps have been taken to document the operations of the benefit.