Instructions For Schedule H (Form 5500) - Financial Information

information contained on line 4a is not presented in accordance

conveying the right to use property, plant, or equipment for a

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

stated period. A lease is in default when the required

that the scheduled information required by line 4a does not

payment(s) has not been made. An uncollectible lease is one

contain all the required information or contains information that

where the required payments have not been made and for

is inaccurate or is inconsistent with the plan’s financial

which there is little probability that payment will be made.

statements, the IQPA report must make the appropriate

Line 4d. Plans that check ‘‘Yes’’ must enter the amount and

disclosures in accordance with generally accepted auditing

complete Part III of Schedule G. Check ‘‘Yes’’ if any nonexempt

standards. For more information, see EBSA’s Frequently Asked

transaction with a party-in-interest occurred regardless of

Questions About Reporting Delinquent Contributions on the

whether the transaction is disclosed in the IQPA’s report. Do

Form 5500, available on the Internet at

not check “Yes” or complete Schedule G, Part III, with respect

These Frequently Asked Questions clarify that plans have an

to transactions that are: (1) statutorily exempt under Part 4 of

obligation to include delinquent participant contributions on their

Title I of ERISA; (2) administratively exempt under ERISA

financial statements and supplemental schedules and that the

section 408(a); (3) exempt under Code sections 4975(c) or

IQPA’s report covers such delinquent contributions even though

4975(d); (4) the holding of participant contributions in the

they are not required to be included on Part III of the Schedule

employer’s general assets for a welfare plan that meets the

G. Although all delinquent participant contributions must be

conditions of ERISA Technical Release 92-01; (5) a transaction

reported on line 4a, delinquent contributions for which the DOL

of a 103-12 IE with parties other than the plan; or (6) delinquent

VFCP requirements and the conditions of PTE 2002-51 have

participant contributions or delinquent participant loan

been satisfied do not need to be treated as nonexempt

repayments reported on line 4a.

party-in-interest transactions.

Note. See the instructions for Part III of the Schedule G (Form

The VFCP describes how to apply, the specific transactions

5500) concerning nonexempt transactions and party-in-interest.

covered (which transactions include delinquent participant

You may indicate that an application for an administrative

contributions to pension and welfare plans), and acceptable

exemption is pending. If you are unsure as to whether a

methods for correcting violations. In addition, applicants that

transaction is exempt or not, you should consult with either the

satisfy both the VFCP requirements and the conditions of PTE

plan’s IQPA or legal counsel or both.

2002-51 are eligible for immediate relief from payment of

certain prohibited transaction excise taxes for certain corrected

Applicants that satisfy the VFCP requirements and the

transactions, and are also relieved from the obligation to file the

TIP

conditions of PTE 2002-51 (see the instructions for line

IRS Form 5330 with the IRS. For more information, see 71 Fed.

4a) are eligible for immediate relief from payment of

Reg. 20261 (Apr. 19, 2006) and 71 Fed. Reg. 20135 (Apr. 19,

certain prohibited transaction excise taxes for certain corrected

2006). Information about the VFCP is also available on the

transactions, and are also relieved from the obligation to file the

Internet at

IRS Form 5330 with the IRS. For more information, see 71 Fed.

Reg. 20261 (Apr. 19, 2006) and 71 Fed. Reg. 20135 (Apr. 19,

All delinquent participant contributions must be reported on

2006). When the conditions of PTE 2002-51 have been

line 4a even if violations have been corrected.

satisfied, the corrected transactions should be treated as

Line 4a Schedule. Attach a Schedule of Delinquent

exempt under Code section 4975(c) for the purposes of

Participant Contributions using the format below if you entered

answering line 4d.

“Yes.” If you chose to include participant loan repayments on

Line 4e. Plans that check ‘‘Yes’’ must enter the aggregate

line 4a, you must apply the same supplemental schedule and

amount of fidelity bond coverage for all claims. Check ‘‘Yes’’

IQPA disclosure requirements to the loan repayments as

only if the plan itself (as opposed to the plan sponsor or

applied to delinquent transmittals of participant contributions.

administrator) is a named insured under a fidelity bond from an

approved surety covering plan officials and that protects the

Schedule H Line 4a — Schedule of Delinquent

plan from losses due to fraud or dishonesty as described in 29

Participant Contributions

CFR Part 2580. Generally, every plan official of an employee

benefit plan who ‘‘handles’’ funds or other property of such plan

Participant

Total that Constitute Nonexempt Prohibited Total Fully

must be bonded. Generally, a person shall be deemed to be

Contributions

Transactions

Corrected

‘‘handling’’ funds or other property of a plan, so as to require

Transferred

Under

bonding, whenever his or her duties or activities with respect to

Late to Plan

VFCP and

given funds are such that there is a risk that such funds could

PTE

be lost in the event of fraud or dishonesty on the part of such

Check here

Contributions Contributions Contributions 2002 – 51

person, acting either alone or in collusion with others. Section

if Late

Not Corrected Corrected

Pending

412 of ERISA and 29 CFR Part 2580 describe the bonding

Participant

Outside

Correction in

requirements, including the definition of ‘‘handling’’ (29 CFR

Loan

VFCP

2580.412-6), the permissible forms of bonds (29 CFR

Repayments

2580.412-10), the amount of the bond (29 CFR Part 2580,

are included:

subpart C), and certain exemptions such as the exemption for

unfunded plans, certain banks and insurance companies

(ERISA section 412), and the exemption allowing plan officials

Line 4b. Plans that check ‘‘Yes’’ must enter the amount and

to purchase bonds from surety companies authorized by the

complete Part I of Schedule G. The due date, payment amount

Secretary of the Treasury as acceptable reinsurers on federal

and conditions for determining default of a note or loan are

bonds (29 CFR 2580.412-23). Information concerning the list of

usually contained in the documents establishing the note or

approved sureties and reinsurers is available on the Internet at

loan. A loan by the plan is in default when the borrower is

For more information on the fidelity

unable to pay the obligation upon maturity. Obligations that

bonding requirements, see Field Assistance Bulletin 2008-04,

require periodic repayment can default at any time. Generally,

available on the Internet at

loans and fixed income obligations are considered uncollectible

Note. Plans are permitted under certain conditions to purchase

when payment has not been made and there is little probability

fiduciary liability insurance. These fiduciary liability insurance

that payment will be made. A fixed income obligation has a

policies are not written specifically to protect the plan from

fixed maturity date at a specified interest rate. Do not include

losses due to dishonest acts and cannot be reported as fidelity

participant loans made under an individual account plan with

bonds on line 4e.

investment experience segregated for each account that were

made in accordance with 29 CFR 2550.408b-1 and secured

Line 4f. Check ‘‘Yes,’’ if the plan suffered or discovered any

solely by a portion of the participant’s vested accrued benefit.

loss as a result of any dishonest or fraudulent act(s) even if the

Line 4c. Plans that check ‘‘Yes’’ must enter the amount and

loss was reimbursed by the plan’s fidelity bond or from any

complete Part II of Schedule G. A lease is an agreement

other source. If ‘‘Yes’’ is checked enter the full amount of the

-34-

Instructions for Schedule H (Form 5500)

Instructions For Schedule H (Form 5500) - Financial Information - 2009 Page 6

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