Reconcile the plan census and assets before Form 5500

A defined contribution plan's Form 5500 preparation needs a census that explains participation and an asset schedule that explains the money. Confirm the plan year, plan identity and any merger, termination or recordkeeper change first. The form and required schedules depend on the plan's actual characteristics and the instructions for that reporting year.

Combine HR and recordkeeper data using a stable participant reference. An active employee roster can omit former employees with plan balances, while a custodian's account list may omit eligible employees without balances. Preserve those populations separately so the administrator can apply the definitions required for each reported count.

Reconcile beginning and ending populations through eligibility changes, new accounts, departures, distributions and transfers. Ask the administrator how beneficiaries and deceased participants should be included. Keep the supporting event dates and distinguish an employment termination from payment of the participant's entire benefit.

The Form 5500 instructions request particular participant counts, including participants with account balances for defined contribution plans. Give the preparer both the detailed census and the proposed counts. Do not use the number of employees receiving a W-2 as a substitute for every line on the form.

Resolve duplicate participant records created during a provider migration. An old account and a new account can represent one person, while two people with similar names remain separate. Keep a reconciliation of migrated identifiers and document the administrator's treatment of any unresolved account before finalizing the count.

Build a plan-level rollforward from beginning assets to ending assets using contributions, investment results, distributions, expenses and transfers. Obtain the recordkeeper's detailed activity and the custodian statements, including assets held outside the main platform. A dashboard total may leave out a participant loan or an investment administered separately.

Compare payroll deductions and employer contribution records with amounts allocated by the plan. Identify contributions in transit, rejected allocations and corrections. Ask the preparer which amounts are receivables under the reporting basis; a transfer arriving after year-end should not be assigned a year solely from its bank settlement date.

For an illustrative reconciliation, a transfer between two plan investment providers should appear as a movement within the complete plan records. It should not inflate both contributions and distributions merely because two provider reports describe incoming and outgoing cash. Preserve the source statements and the elimination explanation.

Give the administrator the final counts, asset categories and prior-year filing before deciding which schedules and audit requirements apply. The instructions contain plan-specific rules and exceptions. Obtain the reviewer's documented conclusion instead of selecting a short form because the employer considers itself small.

Where an audit is required, reconcile the financial schedules to the audited statements and explain presentation differences. Keep outstanding corrections and reportable transactions visible to the administrator and auditor. Review the complete filing package before signature, then retain the submitted version and EFAST2 status with the evidence supporting the census and assets.