In February 2023, the Department of Labor announced changes to the following forms, effective for plan years beginning on or after January 1, 2023:

• Form 5500 Annual Return/Report of Employee Benefit Plan
• Form 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan

One significant update is the change in participant-count methodology to simplify reporting for small plans. Prior to January 1, 2023, participant counts were based on all employees who were eligible to participate in the plan.

Effective January 1, 2023, participant counts will be based on the number of participants with an account balance. Plans that have fewer than 100 participants with account balances as of January 1, 2023, will be eligible to file a Form 5500-SF and will not be required to attach audited financial statements to the Form 5500 filing. The goal of this change is to reduce the cost of administering an employee benefit plan for small plans.

Participant counts are as of the beginning of the plan year, so the change is effective for 2023 calendar year plans. Employers should work with their third-party administrator to determine what Form 5500 will need to be filed for their 2023 plan year.

Citrin Cooperman’s Employee Benefit Plan Audit Practice can help ensure your plan complies with the various regulations in place so you can focus on achieving your business objectives. If you have questions related to the changes in requirements for employee benefit plan audits, reach out to our Employee Benefit Plan Audit Practice Leader Jamie Lontz at jlontz@citrincooperman.com or your Citrin Cooperman advisor.