Instructions For Schedule H (Form 5500) - Financial Information

Code section 72(p) and Treasury Regulations section 1.72(p)-1

Line 2i(3). Enter the total fees paid (or in the case of accrual

only if both of the following circumstances apply:

basis plans, costs incurred during the plan year but not paid as

of the end of the plan year) to an individual, partnership or

1. Under the plan, the participant loan is treated as a

corporation (or other person) for advice to the plan relating to its

directed investment solely of the participant’s individual

investment portfolio. These may include fees paid to manage

account; and

the plan’s investments, fees for specific advice on a particular

2. As of the end of the plan year, the participant is not

investment, and fees for the evaluation of the plan’s investment

continuing repayment under the loan.

performance.

If either of these circumstances does not apply, a deemed

Line 2i(4). Other expenses are those that cannot be included

distribution of a participant loan should not be reported on line

in 2i(1) through 2i(3). These may include plan expenditures

2g. Instead, the current value of the participant loan (including

such as salaries and other compensation and allowances (e.g.,

interest accruing thereon after the deemed distribution) must be

payment of premiums to provide health insurance benefits to

included on line 1c(8), column (b) (participant loans - end of

plan employees), expenses for office supplies and equipment,

year), without regard to the occurrence of a deemed

cars, telephone, postage, rent, expenses associated with the

distribution.

ownership of a building used in the operation of the plan, and all

miscellaneous expenses.

Note. The amount to be reported on line 2g of Schedule H or

Schedule I must be reduced if, during the plan year, a

Line 2l. Include in these reconciliation figures the value of all

participant resumes repayment under a participant loan

transfers of assets or liabilities into or out of the plan resulting

reported as a deemed distribution on line 2g for any earlier

from, among other things, mergers and consolidations. A

year. The amount of the required reduction is the amount of the

transfer of assets or liabilities occurs when there is a reduction

participant loan reported as a deemed distribution on line 2g for

of assets or liabilities with respect to one plan and the receipt of

the earlier year. If entering a negative number, enter a minus

these assets or the assumption of these liabilities by another

sign “ – ” to the left of the number. The current value of the

plan. A transfer is not a shifting of one plan’s assets or liabilities

participant loan must then be included in line 1c(8), column (b),

from one investment to another. A transfer is not a distribution

of Schedule H (participant loans - end of year) or in line 1a,

of all or part of an individual participant’s account balance that

column (b), of Schedule I (plan assets - end of year).

is reportable on IRS Form 1099-R, Distributions From

Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs,

Although certain participant loans deemed distributed are to

Insurance Contracts, etc., (see the instructions for line 2e).

be reported on line 2g of the Schedule H or Schedule I, and are

Transfers out at the end of the year should be reported as

not to be reported on the Schedule H or Schedule I as an asset

occurring during the plan year. Include premium payments to

thereafter (unless the participant resumes repayment under the

the PBGC when paid from plan assets.

loan in a later year), they are still considered outstanding loans

and are not treated as actual distributions for certain purposes.

Note. If this Schedule H is filed for a CCT, PSA, MTIA, or

See Q&As 12 and 19 of Treasury Regulations section

103-12 IE, report the value of all asset transfers to the CCT,

1.72(p)-1.

PSA, MTIA, or 103-12 IE, including those resulting from

contributions to participating plans on line 2l(1), and report the

Line 2h. Interest expense is a monetary charge for the use of

total value of all assets transferred out of the CCT, PSA, MTIA,

money borrowed by the plan. This amount should include the

or 103-12 IE, including assets withdrawn for disbursement as

total of interest paid or to be paid (for accrual basis plans)

benefit payments by participating plans, on line 2l(2).

during the plan year.

Contributions and benefit payments are considered to be made

Line 2i. Report all administrative expenses (by specified

to/by the plan (not to/by a CCT, PSA, MTIA, or 103-12 IE).

category) paid by or charged to the plan, including those that

Line 3. The administrator of an employee benefit plan who

were not subtracted from the gross income of CCTs, PSAs,

files a Schedule H generally must engage an IQPA pursuant to

MTIAs, and 103-12 IEs in determining their net investment

ERISA section 103(a)(3)(A) and 29 CFR 2520.103-1(b). This

gain(s) or loss(es). Expenses incurred in the general operations

requirement also applies to a Form 5500 filed for a 103-12 IE

of the plan are classified as administrative expenses.

and for a GIA (see 29 CFR 2520.103-12 and 29 CFR

Line 2i(1). Include the total fees paid (or in the case of

2520.103-2). The IQPA’s report must be attached to the Form

accrual basis plans, costs incurred during the plan year but not

5500 when a Schedule H is attached unless line 3d(1) or 3d(2)

paid as of the end of the plan year) by the plan for outside

on the Schedule H is checked.

accounting, actuarial, legal, and valuation/appraisal services.

Include fees for the annual audit of the plan by an independent

29 CFR 2520.103-1(b) requires that any separate financial

qualified public accountant (IQPA); for payroll audits; for

statements prepared in order for the IQPA to form the opinion

accounting/bookkeeping services; for actuarial services

and notes to these financial statements must be attached to the

rendered to the plan; and to a lawyer for rendering legal

Form 5500. Any separate statements must include the

opinions, litigation, and advice (but not for providing legal

information required to be disclosed in Parts I and II of the

services as a benefit to plan participants). Report here fees and

Schedule H; however, they may be aggregated into categories

expenses for corporate trustees and individual plan trustees,

in a manner other than that used on the Schedule H. The

including reimbursement of expenses associated with trustees,

separate statements must consist of reproductions of Parts I

such as lost time, seminars, travel, meetings, etc. Include the

and II or statements incorporating by reference Parts I and II.

fee(s) for valuations or appraisals to determine the cost, quality,

See ERISA section 103(a)(3)(A), and the DOL regulations 29

or value of an item such as real property, personal property

CFR 2520.103-1(a)(2) and (b), 2520.103-2, and 2520.104-50.

(gemstones, coins, etc.), and for valuations of closely held

Note. Delinquent participant contributions reported on line 4a

securities for which there is no ready market. Do not include

should be treated as part of the separate schedules referenced

amounts paid to plan employees to perform bookkeeping/

in ERISA section 103(a)(3)(A) and 29 CFR 2520.103-1(b) and

accounting functions that should be included in line 2i(4).

2520.103-2(b) for purposes of preparing the IQPA’s opinion

Line 2i(2). Enter the total fees paid (or in the case of accrual

described on line 3 even though they are no longer required to

basis plans, costs incurred during the plan year but not paid as

be listed on Part III of the Schedule G. If the information

of the end of the plan year) to a contract administrator for

contained on line 4a is not presented in accordance with

performing administrative services for the plan. For purposes of

regulatory requirements, i.e., when the IQPA concludes that the

the return/report, a contract administrator is any individual,

scheduled information required by line 4a does not contain all

partnership or corporation, responsible for managing the clerical

the required information or contains information that is

operations (e.g., handling membership rosters, claims

inaccurate or is inconsistent with the plan’s financial

payments, maintaining books and records) of the plan on a

statements, the IQPA report must make the appropriate

contractual basis. Do not include salaried staff or employees of

disclosures in accordance with generally accepted auditing

the plan or banks or insurance carriers.

standards. Delinquent participant contributions that are exempt

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Instructions for Schedule H (Form 5500)

Instructions For Schedule H (Form 5500) - Financial Information - 2009 Page 4

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