403(b) Plans: Caution on Number of Plan Participants for Form 5500 Reporting

Sponsors of 403(b) retirement plans should take special note of the number of participants reported when filing their 2014 Form 5500 because the new form requires that active participants as of the beginning of the year be reported. In the past, many 403(b) plan sponsors may have reported only active participants who actually contributed to the plan or currently received employer contributions. Active participants should include all employees who are eligible to make elective deferrals to the 403(b) plan, even if they choose not to do so.

Findley Davies recommends taking a close look at this change because correct participant counts may cause the plan to be considered a large plan (generally, over 100 participants) and thus subject to an annual audit.

DOL 5500 Forms