May, 2010

Contents

• The 2009 Form 5500 – What You Should Know
• Contact SC&H Tax & Advisory Services

Not-for-Profit Services

We specialize in providing not-for-profit organizations a variety of comprehensive solutions for their accounting and consulting needs.

At SC&H, we know that not-for-profit organizations are unlike any other type of business. From uncertain budgets and lean accounting staff, to board relations and unusual tax issues, your goals and challenges are unique. Only a service provider with a complete grasp of these issues and a strong commitment to serving not-for-profit organizations can provide the responsiveness and quality of services that will exceed your expectations.

Many of our partners and managers are active on not-for-profit boards, which provide us with a first hand understanding of your needs. This understanding is why SC&H has become the CPA and management consulting firm of choice for many not-for-profit entities including educational and healthcare institutions, associations, religious organizations and foundations.

Services include:

• Financial statement audits and reviews
• A-133 audits
• Employee benefit audits and consultation
• Internal auditing
• Evaluation of internal controls
• Tax compliance
• UBIT studies and FIN 48 analysis
• Strategic planning
• Change management
• Organizational development

Testimonials

"SC&H has the breadth of a national firm while providing personalized local service in an efficient and customer friendly manner. I highly recommend this firm." - CFO of a not-for-profit organization

"I am pleased to share my thoughts regarding my association with SC&H. They have provided tax preparation and advisory services to my organization for over ten years. I find the professionals at SC&H to be very knowledgeable of the issues facing not-for-profit organizations. I highly recommend this firm." - CFO of a not-for-profit organization

The 2009 Form 5500 – What You Should Know

As if the new 403(b) compliance and reporting regulatory changes were not enough to keep not-for-profit organizations busy, the Employee Benefit Security Administration (EBSA) and the Department of Labor have implemented numerous changes to the Form 5500 and the related filing process for the 2009 filing year. These changes will affect all organizations sponsoring employee benefit plans.

The Form — what has changed?

• Form 5500 SF – This new, short form is only 2 pages in length with no required supporting schedules.  The new form will be available to small plans who meet specific criteria set forth by the EBSA.  In order to file a Form 5500 SF, a plan must:
1. Be a small plan (i.e., generally a plan with fewer than 100 participants at the beginning of the plan year),
2. Meet the conditions for being exempt from the requirement for an audit by an independent qualified public accountant (IQPA),
3. Have 100% of its assets invested in secure investments with a readily determinable fair value,
4. Hold no employer securities, and
5. Not be a multiemployer plan.
• Schedule A – New Form 5500 rules require plan sponsors to disclose insurers that do not provide adequate information for Form 5500 reporting. In addition, plan sponsors must break out commission information previously reported on line 2 on lines 2 and 3.
• Schedule C - In an effort to promote full transparency with regards to plan expenses, both direct and indirect compensation paid with plan assets must be shown on Schedule C of Form 5500. In the past, only direct compensation was reported. Examples of reportable indirect compensation include fees or expense reimbursements received by an individual or entity which are included in the value of the investment. Such expenses have often been reported as part of the return on investment as opposed to being shown as an expense. This new reporting policy will require service providers to disclose expenses which were often "hidden" costs in the past.
• Schedule R – There are three new sections on Schedule R of Form 5500.  Part IV pertains solely to ESOPs and replaces Schedule E, which was included in prior Form 5500s. Part V pertains only to multiemployer defined benefit plans.  Lastly, Part VI of the Schedule relates to defined benefit plans covering 1,000 or more participants. Schedule R requires the reporting of information on the duration of investments held by such plans.

• Schedule SSA – The Schedule SSA is an IRS-only form which has previously been attached to all Form 5500 filings. Since the schedule is only used by the IRS, the Schedule has been removed from the DOL/EBSA filing. The information previously reported in Schedule SSA must still be reported, however, the plan sponsor will use a separate form filed directly with the IRS.  The new form will follow the same reporting deadlines as Form 5500.

The Filing Process — what has changed?

All 2009 Forms 5500 must be filed electronically using the DOL's new filing system entitled EFAST2. Prior year amended returns will require electronic filing with few exceptions. As part of the filing process, plan sponsors and administrators will be required to file for "credentials" with the DOL in order to sign and transmit electronic filings. All attachments, including audit reports and financial statements required for large plans, must be attached to the return and submitted in electronic format as well.

Credentials can be requested at the EFAST website: http://www.efast.dol.gov by selecting "register" in the welcome screen.  The registration process should not take more than 15 minutes and should be completed well in advance of filing the forms.

For more information, or for assistance with your organizations Form 5500 Filings, contact Jennifer Amato at 410-403-1608 or JAmato@SCandH.com.

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For More Information

For more information about Not-For-Profit services offered by SC&H Tax & Advisory Services, LLC, contact Michael Young or Lori Burghauser.

Michael Young
Audit Director
(410) 403-1513

Lori Burghauser
Tax Principal
(410) 403-1616

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