Form 5500 Schedule A Instructions - Insurance Information

other similar organization, and the contract or policy is reported

Complete elements (a) through (e) for each person as

on a Schedule A, payments of reasonable monetary

specified below.

compensation by the insurer out of its general assets to

Element (a). Enter the name and address of the agents,

affiliates or third parties for performing administrative activities

brokers, or other persons to whom commissions or fees were

necessary for the insurer to fulfill its contractual obligation to

paid.

provide benefits, where there is no direct or indirect charge to

Element (b). Report all sales and base commissions here. For

the plan for the administrative services other than the

purposes of this element, sales and/or base commissions are

insurance premium, then the payments for administrative

monetary amounts paid by an insurer that are charged directly

services by the insurer to the affiliates or third parties do not

to the contract or policy and that are paid to a licensed agent or

need to be reported on lines 2 and 3 of Schedule A. This would

broker for the sale or placement of the contract or policy. All

include compensation for services such as recordkeeping and

other payments should be reported in element (c) as fees.

claims processing services provided by a third party pursuant

Element (c). Fees to be reported here represent payments by

to a contract with the insurer to provide those services but

an insurer attributable directly or indirectly to a contract or

would not include compensation provided by the insurer

policy to agents, brokers, and other persons for items other

incidental to the sale or renewal of a policy, such as finder’s

than sales and/or base commissions (e.g., service fees,

fees, insurance brokerage commissions and fees, or similar

consulting fees, finders fees, profitability and persistency

fees.

bonuses, awards, prizes, and non-monetary forms of

Schedule A reporting also is not required for compensation

compensation). Fees paid to persons other than agents and

paid by the insurer to a “general agent” or “manager” for that

brokers should be reported here, not in Parts II and III on

general agent’s or manager’s management of an agency or

Schedule A as acquisition costs, administrative charges, etc.

performance of administrative functions for the insurer. For this

Element (d). Enter the purpose(s) for which fees were paid.

purpose, (1) a “general agent” or “manager” does not include

brokers representing insureds, and (2) payments would not be

Element (e). Enter the most appropriate organization code for

treated as paid for managing an agency or performance of

the broker, agent, or other person entered in element (a).

administrative functions where the recipient’s eligibility for the

Code

Type of Organization

payment or the amount of the payment is dependent or based

Banking, Savings & Loan Association, Credit Union,

on the value (e.g., policy amounts, premiums) of contracts or

or other similar financial institution

policies (or classes thereof) placed with or retained by ERISA

Trust Company

plan(s).

Insurance Agent or Broker

Schedule A reporting is not required for occasional non-

Agent or Broker other than insurance

monetary gifts or meals of insubstantial value that are tax

Third party administrator

deductible for federal income tax purposes by the person

Investment Company/Mutual Fund

providing the gift or meal and would not be taxable income to

Investment Manager/Adviser

the recipient. For this exemption to be available, the gift or

Labor Union

gratuity must be both occasional and insubstantial. For this

Foreign entity (e.g., an agent or broker, bank,

exemption to apply, the gift must be valued at less than $50,

insurance company, etc., not operating within the

the aggregate value of gifts from one source in a calendar year

jurisdictional boundaries of the United States)

must be less than $100, but gifts with a value of less than $10

Other

do not need to be counted toward the $100 annual limit. If the

For

plans, GIAs, MTIAs, and 103-12 IEs required to file Part

$100 aggregate value limit is exceeded, then the aggregate

I of Schedule C, commissions and fees listed on the Schedule

value of all the gifts will be reportable. For this purpose, non-

A are not required to be reported again on Schedule C. The

monetary gifts of less than $10 also do not need to be included

amount of the compensation that must be reported on

in calculating the aggregate value of all gifts required to be

Schedule A must, however, be taken into account in

reported if the $100

limit is exceeded.

determining whether the agent’s, broker’s, or other person’s

Gifts from multiple employees of one service provider

direct or indirect compensation in relation to the plan or DFE is

should be treated as originating from a single source when

$5,000 or more and, thus, requiring the compensation not

calculating whether the $100 threshold applies. On the other

listed on the Schedule A to be reported on the Schedule C.

hand, in applying the threshold to an occasional gift received

See FAQs about the Schedule C available on the EBSA

from one source by multiple employees of a single service

website at

provider, the amount received by each employee should be

Part II – Investment and Annuity Contract

separately determined in applying the $50 and $100

thresholds. For example, if six employees of a broker attend a

Information

business conference put on by an insurer designed to educate

Line 4. Enter the current value of the plan’s interest at year

and explain the insurer’s products for employee benefit plans,

end in the contract reported on line 7, e.g., deposit

and the insurer provides, at no cost to the attendees,

administration (DA), immediate participation guarantee (IPG),

refreshments valued at $20 per individual, the gratuities would

or guaranteed investment contracts (GIC).

not be reportable on lines 2 and 3 of the Schedule A even

Exception. Contracts reported on line 7 need not be included

though the total cost of the refreshments for all the employees

on line 4 if (1) the Schedule A is filed for a defined benefit

would be $120.

pension plan and the contract was entered into before March

These thresholds are for purposes of Schedule A reporting.

20, 1992, or (2) the Schedule A is filed for a defined

Filers are cautioned that the payment or receipt of gifts and

contribution pension plan and the contract is a fully benefit-

gratuities of any amount by plan fiduciaries may violate ERISA

responsive contract, i.e., it provides a liquidity guarantee by a

and give rise to civil liabilities and criminal penalties.

financially responsible third party of principal and previously

Line 3. Identify agents, brokers, and other persons individually

accrued interest for liquidations, transfers, loans, or hardship

withdrawals initiated by plan participants exercising their rights

in descending order of the amount paid. Complete as many

to withdraw, borrow, or transfer funds under the terms of a

entries as necessary to report all required information.

-22-

Instructions for Schedule A (Form 5500)

Form 5500 Schedule A Instructions - Insurance Information - 2016 Page 2

Related Articles

Related forms

Related Categories