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NAVIGATING AND SURVIVING EFAST2 Michael Lafond, Vice President Relius Government Forms

NAVIGATING AND SURVIVING EFAST2 Michael Lafond, Vice President Relius Government Forms michael.lafond@sungard.com. EFAST2 Background. March 31, 2008 - EFAST2 vendor selected December 17, 2008 - EFAST2 system development complete First Half 2009 - Vangent will scale-up the prototype

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NAVIGATING AND SURVIVING EFAST2 Michael Lafond, Vice President Relius Government Forms

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  1. NAVIGATING AND SURVIVING EFAST2 Michael Lafond, Vice President Relius Government Forms michael.lafond@sungard.com

  2. EFAST2 Background • March 31, 2008 - EFAST2 vendor selected • December 17, 2008 - EFAST2 system development complete • First Half 2009 - Vangent will scale-up the prototype • Second Half 2009 - DOL will perform acceptance testing • August 1, 2009 – Third party software acceptance testing started • August 12, 2009 – EFAST2 Developer’s Conference • December 31, 2009 - EFAST2 went live • Are you ready?

  3. Acronyms • EFAST2 – ERISA Filing Acceptance System 2 • Successor to the original DOL EFAST program • IFILE – Internet Filing • “No-Frills” Internet-based filing tool offered by DOL • Intended to provide “Hand Print” form filers with filing option • IFAS – Internet Filing Acceptance System • Core of EFAST2… receives & processes all filings • IREG – Internet Registration • EFAST2 website to provide electronic credentials • XML – Extensible Mark-up Language

  4. New regulations/New forms • E-filing is required • All Form 5500 filings with plan years beginning 1/2009 and later will need to e-file • All forms will change • No barcodes • Form 5500-SF • Many current 5500-EZ filers may use the 5500-SF instead • Will be e-filed • Like all e-filings, will be in public domain • Forms SSA/5558/5500-EZ • No longer filed with Form 5500 • Mailed to IRS • New filing requirements for 403(b) plans • Now full 5500 filing required for many plans • Large plans must have audit

  5. What’s In / What’s Out… • What’s Out (of EFAST2): • Schedule SSA • Schedule E • Form 5500-EZ • Form 5558 • Form EFAST-1 • What’s In (to the IRS) : • Form 8955-SSA • Form 5500-EZ • Form 5558 • What’s In (to EFAST2) • Form 5500-SF • New Acronyms: IREG, IFAS, IFILE, XML, etc.

  6. We’ve always done it this way… • E-Filing requires a change of process • Sending paper copies of filings will no longer suffice • Paper filings no longer accepted • Paper filings must be printed and kept by Plan Sponsor • Sponsors need Internet access and an e-mail account • IREG uses e-mail address to provide electronic “signature” • All data should be gathered before filing is transmitted • DOL will “know” if a required attachment is missing • Audit should be complete prior to filing • DOL will “know” if a required attachment is missing

  7. Credentialing your Clients… • Five types of credentials under IREG • Filing Author - Person who creates the filing, enters data, and transmits the filing in IFILE (Used only with IFILE). • Filing Signer - Person who signs the return; Cannot edit filing • Schedule Author - Can create and edit forms other than the 5500 and 5500-SF; Cannot create or transmit a return (Used only with IFILE). • Transmitter - Company who transmits the completed filing with a third party software solution. • Third Party Software Developer - Company who develops software solutions for the preparation and/or transmission of Form 5500 filings. • Credentials assigned to individuals, not companies • Credentials will expire if not used for three years

  8. Credentialing your Clients…

  9. Credentialing your Clients…

  10. Credentialing your Clients…

  11. Credentialing your Clients…

  12. Credentialing your Clients…

  13. Ready, Set, Attach… • Under EFAST2 there are 51 Attachments types • Actually more, since latest guidance indicates prior year schedules should be attached for delinquent filings • Schedules MB and SB must be printed, signed by an Actuary, scanned into a PDF format, and attached to an electronic filing • Accountant’s Opinion must be on Accountant’s letterhead (showing address), signed, scanned into a PDF format, and attached to an electronic filing • Some early filings submitted password protected PDFs • Filings were “not accepted” – Unprocessable? • All other attachments must be in TXT or PDF format

  14. Paper? I thought you said e‑filing… • Although EFAST2 is all electronic, there is still enough paper to go around • Certain attachments still have to be printed, signed, then scanned • A final copy of the filing, including all attachments, needs to be printed, signed, and retained • Enforcement letters* will still be sent on paper from the office of the OCA, although correspondence letters are a thing of the past *45 Day Notice of Intent to Assess Penalties

  15. And the Status is… • Processing. The DOL has not completed its review and the preparer should return later for an updated status. • Filing stopped. The DOL recognizes the filing as a 5500 but some problem in the filing has caused the DOL’s review to stop. The employer should file an amended return correcting the problem. • Filing error. The DOL recognizes the filing as a 5500 but the DOL has determined that there is an error or omission. The employer should file an amended return correcting the error or omission. • Filing received. The DOL recognizes the filing as a 5500 and the DOL has determined that there are no errors or omissions but the filing may contain a DOL warning. Therefore, a preparer will need to review the status completely to determine if the filing contains a warning.

  16. Get the word out… • Communicate the changes to your Plan Sponsors before the DOL does • New look to the forms • New filing requirements • Must obtain electronic filing credentials • Must electronically file • Must have Internet access

  17. This ELF doesn’t work for Santa… • Electronic Filing (ELF) is now required • SunGard’s 5500 Web Client; the EFAST2 solution • Client Collaboration • Data Validation • EFAST2 and proprietary checks • Automatic Notifications • Fewer Credentials • TPA or Preparer Firm “Owns” Plans (Not Individual Filing Author) • E-filing Solution – “Signing Ceremony”

  18. Breaking News…. • Schedule SSA -> Form 8955-SSA • Will likely contain barcode • May not be released until April or May • IRS considering relief • Lawrence, KS mailbox closed Oct 16, 2010 for 2008 fiscal year filings • 2010 Instructions for Schedules SB/MB not available until April or May 2010 • Short 2011 plan years will file on 2010 forms

  19. Breaking News…. • All plans which are processable, are “live” filings • OCA may review any live filing • Users may change PIN and Password…. Not User ID • Passwords expire maybe as frequently as every 30 days, although it could be as long as 45 days • Only latest amendment is visible in the public disclosure room

  20. Breaking News…. • Q32: I am a third party preparer that represents small businesses that do not have their own computers. Can I register for Filing Signer credentials on their behalf? • No. The EFAST2 process for obtaining Filing Signer credentials is designed so that the person signing electronically must be the person registering for the credentials. Access to any computer with an Internet connection is all that is required to register. Thus, your client may come to your office, use a personal computer at home, or go to a public library or copying center with a computer, and register for credentials using free email accounts or an email account provided by your company (e.g., tpafirm.com). • 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.

  21. Breaking News…. • Changing a filing will invalidate signatures • Care Of information should go into line 2A of Form 5500 and 5500-SF • Postcards were scheduled to be sent to all Sponsors in January… Anyone receive one? • New Size Limitation • 2 GB Limit will be reduced • Likely to approx 100 MB Total • Likely 10 MB per attachment

  22. Breaking News…. • During an EFAST2 webcast sponsored by ASPPA on October 22nd, we had an informal interactive poll.  Here's how approximately 100 Third Party Preparers responded to the three questions asked: • What software will you use to prepare filings? • 90% said Third Party Developer • 5% said IFILE only • 5% said combination of third party and IFILE

  23. Breaking News…. • During an EFAST2 webcast sponsored by ASPPA on October 22nd, we had an informal interactive poll.  Here's how approximately 100 Third Party Preparers responded to the three questions asked: • Will you submit mostly batches or single filings? • 70% said single filings • 15% said both single and batch filings • 15% said don't know

  24. Breaking News…. • During an EFAST2 webcast sponsored by ASPPA on October 22nd, we had an informal interactive poll.  Here's how approximately 100 Third Party Preparers responded to the three questions asked: • How will you create most attachments? • 72% said write/print to PDF • 12% said scan to PDF • 1% said save as TXT • 15% said don't know

  25. Keys to Success • Train Your Staff • Learn About the New Forms and Regulations • Understand the 403(b) PPA Filing Requirements • Examine your current process to determine procedures/processes requiring change • If possible, implement those changes that can be completed this year • Verify e-mail addresses for all clients and strongly suggest internet access for those without it currently

  26. Keys to Success • Everyone involved needs an e-mail address • Determine which type of credentials are necessary for each party involved in the process • Clearly communicate with involved parties how to apply for credentials, and which they need • If you have plans requiring an Accountant’s Opinion, schedule and obtain the audit early • The AO must appear on letterhead, contain a wet signature, and be scanned into a PDF • Actuaries also must provide a wet signature on Schedules SB/MB

  27. Keys to Success • All attachments must be provided electronically • Communicate early and often • Let clients know about form changes, e-file mandate, and relevant timelines • Stress the need to obtain credentials and e-file in a timely fashion • Plan to file early if at all possible • Run “test cases” early, typical of your standard books of business

  28. Keys to Success • Consider extra staffing to help with the process and to answer client calls • Many, if not all, attachments will begin as paper documents and must be scanned • A good scanner or PDF generation tool will be important to your success • Stay up to date on the latest EFAST2 news and review reputable sources of information • Develop a checklist for clients to insure everything is getting filed properly

  29. Introduction EFAST2 Info Web Sites • SunGard Technical Updates • www.relius.net/News/TechnicalUpdates.aspx?T=P • SunGard Navigating Rules & Regs • www.sungard.com/pensionregs • DOL EFAST2 Webcast (Feb 2009) • https://event.on24.com/eventRegistration/EventLobbyServlet?target=registration.jsp&eventid=132340&sessionid=1&key=5B654280E30A42B0E780909D7C483674&sourcepage=register

  30. EFAST2 Toolkit If you don’t already “subscribe” to the Technical Updates, you’ll want to be sure you do to stay abreast of all the upcoming information on EFAST2. Call 800-326-7235, Option 6.

  31. NAVIGATING AND SURVIVING EFAST2 Michael Lafond, Vice President Relius Government Forms

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