11/09/2009
The DOL has clarified that 5500 filing signers (plan administrators) may not share their EFAST2 PIN with 5500 preparers and that no formalized hardship process will be established for EFAST 2 signers without access to the internet.
Background
Under EFAST2, 5500 filers must have access to the internet in order to complete two steps necessary for 5500 filings. Filers must have access to the internet and email to register at the DOL's EFAST2 website and receive filing credentials (credentials include a username, password and PIN). EFAST2 electronic credentials can be obtained beginning January 2010 at the EFAST2 web site (www.efast.dol.gov). Filers must also have access to the internet to electronically sign a completed 5500 form (e-signatures may be entered at a third party software website or the DOL's IFILE site).
Due to concerns that some 5500 filers may have difficulty accessing the internet, many groups have approached the DOL seeking to clarify situations in which a 5500 filer could share e-signature PINs with a preparer. Some suggested a formalized system whereby a preparer could establish a hardship in certain circumstances and preparers could have a limited power of attorney to sign 5500 forms electronically on behalf of signers after the signer actually views and manually signs the 5500 forms.
New Guidance
The DOL today released a new Q&A on their Frequently Asked Questions Page (reproduced below) that clarifies e-signature PINs may not be shared and does not include a formalized hardship exception process for the electronic signature requirement.
The DOL has informally indicated that in "true hardship" cases, preparers should contact the DOL for assistance/guidance as to how to proceed in cases where electronic signatures/filing is truly not possible. However, as the recent Q&A clarifies, the general expectation is that all 5500 signers must obtain electronic signature credentials (PIN, username and password) from the DOL website and must electronically sign the 5500 form.Q33: I am a Plan Administrator that needs to electronically sign a Form 5500. Can I tell my preparer what my PIN is so they can sign and submit it for me?
As the Plan Administrator, the Form 5500 or 5500-SF that will be sent to EFAST2 must be examined by you before it is submitted. Your signature attests that has been done and that, to the best of your knowledge and belief, it is true, correct, and complete. Since the EFAST2 PIN is the plan administrator/sponsor/DFE's electronic signature for purposes of the Form 5500 and Form 5500-SF, PINs must be protected and not shared. We appreciate the fact that some filers may find it easier to comply with the electronic signature requirement if PIN sharing were permitted. However, we believe plan administrators and other filers will be able to comply with their annual reporting obligations within the EFAST2 system PIN requirements even if some filers will need to adjust their practices to address individual challenges.
If preparers have clients without access to the internet, some options to consider include:
- Allowing signers to come into preparers' offices to sign 5500 forms once they are prepared (third party software vendors are required to mask PINs so that signers could sit at the same desk with a preparer and enter their PIN without the preparer gaining access to the PIN);
- For clients that are some distance away, you may want to have them look into local resources such a libraries for public computers with access to the internet;
- For clients without email addresses, you may want to consider whether other staff members have email addresses that could be used or consider setting up a new email account (gmail and yahoo offer free email accounts).
- There may be other options available if the above do not work or are unrealistic for certain clients - consult with legal counsel and/or contact the DOL.
If you have any questions please feel free to contact us at support@ftwilliam.com or call 800.596.0714.