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ERISA Filing Acceptance System - Part 2 (EFAST2)

Effective: January 1, 2009

The Employee Retirement Income Security Act of 1974 (ERISA) and provisions of the Internal Revenue Code require certain employee benefit plans, welfare benefit plans, and direct filing entities (DFEs) to submit information annually to the Government regarding their size, funding, operations, and other characteristics. To report this information, these plans must use the Form 5500 series. The for 5500 series includes the Form 5500 Annual Return/Report of Employee Benefit Plan and the Form 5500-SF Short Form Annual Return Report of Small Employee Benefit Plan, which are the elements of the series that can be filed using the EFAST2 system.

The U.S. Department of Labor (DOL) began using its ERISA Filing Acceptance System (EFAST) for Form 5500 filing back in 2000. Since then, minor form changes became a common occurrence to the industry, which conducted its business as usual. On Jan. 1, 2010, however, EFAST2 goes live. By requiring electronic filing of all Form 5500's, EFAST2 changes the way virtually all preparers process Form 5500. EFAST 2 introduces many changes, including the elimination of some schedules and the addition of new forms.

For plan years beginning on or after January 1, 2009, the DOL will require retirement and welfare plans to file their annual reports, Form 5500 and its schedules to be filed electronically under the computerized EFAST2.

The Department of Labor, Internal Revenue Service and the Pension Benefit Guaranty Corporation (PBGC) created the EFAST system to streamline the forms and the methods by which they are filed and processed. The transformation from paper filing to electronic filing will result in significant changes in procedures. To ease the transition, preparers need to familiarize themselves with the new electronic filing system. Electronic filing will be conducted over the Internet rather than via a modem. Even if you filed electronically in the past, your credentials will no longer be valid. You need to apply for new EFAST2 credentials.

Form 5500 Electronic Signature

In order to sign the Form 5500, you will need to obtain "Filing Signer" credentials. The Department of Labor (DOL) will not permit us to obtain the credentials on your behalf. To obtain the filing signer credentials, you must register on the DOL's web site. Once you are on the web site, the steps are self explanatory. However, we have outlined the steps below:

1. Enter the web site address in browser or simply click on link below.

(http://www.efast.dol.gov/portal/app/welcome) on your web browser and click "Register";

2. Read the privacy statement, check the box indicating that you have read the privacy statement, and then check the "Acceptance" tab. The web site then will take you to the next page – "Register Profile Information."

3. Enter the following information: your name, address, phone number, email address and company name. Note: The email address is probably the most important piece of information because the system will use that address to send you a confirmation email. The address should be one you can access easily and which you monitor regularly.

4. On the same page, select the "Filing Signer" credential and click the "Next" tab.

5. On the next page "Register – Challenge Information," select a challenge question (e.g., place or date of birth), provide an answer, and click the "Next" tab.

6. On the "Registration Confirmation" page, click "OK."

7. The DOL will then send an email to the email address you provided. Note: The DOL indicates that the email will occur immediately. If you do not see the email within a reasonable period of time, you may want to check your junk email folder because it is possible that your system may identify the email as spam.

8. In the email, the DOL will provide a link that you will click on to receive your filing signer credentials (which will consist of a User ID and Pin code). The email message includes a statement indicating that as part of the application, you agree not to share the credentials with anyone, including a commercial service provider.

9. When you click on the link, you will land on the "Register – Challenge Verification Page." You will answer the challenge question (e.g., your place of birth) and click "Next."

10. On the next page: "Register – Pin Agreement," you will agree not to share the Pin code, check the box indicating that you have read the agreement, and then click “accept agreement”

11. On the next page: “Register – Signature Agreement,” you will indicate (by clicking the “accept agreement” tab) that you understand that your electronic signature has the same legal force as handwritten signature.

12. On the next page: “Register – Finalize,” the DOL provides you with your use ID and pin code. You will then click “next.” Note: We strongly recommend you print this page.

13. On the next page: “Register – Password,” you will select a 10-16 character password. The password will allow you to access your User ID and pin code. After entering your password, you will click “save.”

14. The last page: Register – Confirmation,” informs you that you have completed the registration process.

Filer of the Form 5500-EZ is exempt from EFAST2

You may file the paper version of the Form 5500-EZ instead of electronic version of the Form 5500 if you meet all of the following conditions:

1. The plan is an one-participant plan. This means either:

a. The plan only covers you (or you and your spouse) and you (or you and your spouse) own the entire business. (The business may be incorporated or unincorporated); or

b. The plan only covers one or more partners (or partner(s) and spouse(s)) in a business partnership.

2. The plan meets the minimum coverage requirements of section 410(b) without being combined with any other plan you may have that covers other employees of your business.

3. The plan does not provide benefits for anyone except you, or you and your spouse, or one or more partners and their spouses.

4. The plan does not cover a business that is a member of:

a. An affiliated service group,

b. A controlled group of corporations, or

c. A group of businesses under common control.

5. The plan does not cover individuals of a business that uses leased employees.

If you do not meet all five of the conditions listed above, file Form 5500 instead of Form 5500-EZ.

Want to know more? Here are some external links:

Check the DOL web site (www.efast.dol.gov ) for additional information about the forms and schedules concerning the EFAST2 processing system, electronic filing, and software.

Instructions for Form 5500: http://www.dol.gov/ebsa/5500main.html

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