There\u2019s bipartisan legislation making its way through Congress that would move the Form 5500 deadline for calendar-year plans from July 31 to October 15, while also eliminating the need for most plans to file Form 5558 extensions and allowing electronic signatures. On paper, it sounds like a simplification effort.<\/p>\n
I understand the reasoning.<\/p>\n
What I don\u2019t understand is why so many people think this solves the real problem.<\/p>\n
In my opinion, it simply kicks the can down the road.<\/p>\n
Today, many providers operate as though the deadline is October 15 anyway because they routinely file extensions. If October 15 becomes the statutory deadline, what incentive is there to finish returns in July, August, or even September?<\/p>\n
There isn\u2019t one.<\/p>\n
Instead, we\u2019re likely to create an even bigger bottleneck.<\/p>\n
Right now, providers have two target dates. Some returns are completed by July 31, while others are extended and completed by October 15. Spread that work over two deadlines, and at least there\u2019s some separation.<\/p>\n
Make October 15 the only deadline, and you\u2019ve just concentrated an enormous amount of work into one filing season. Auditors, TPAs, accountants, recordkeepers, and plan sponsors will all be chasing the same date.<\/p>\n
I\u2019ve spent enough years in this business to know how deadlines work.<\/p>\n
People don\u2019t finish work because they have extra time.<\/p>\n
They finish work because the deadline forces them to.<\/p>\n
That\u2019s human nature.<\/p>\n
The legislation also includes electronic signatures, which I think is long overdue. That modernization makes sense and should reduce unnecessary administrative headaches.<\/p>\n
But moving the filing deadline? I\u2019m skeptical.<\/p>\n
If Congress really wants to improve the Form 5500 process, I\u2019d rather see initiatives that encourage earlier completion, improve data sharing among providers, and reduce the amount of back-and-forth needed to prepare an accurate return.<\/p>\n
Changing the calendar doesn\u2019t necessarily improve the process.<\/p>\n
Sometimes all it does is change the day everyone starts panicking.<\/p>\n
And if you\u2019ve worked through enough October 15 filing seasons, you know exactly what I\u2019m talking about.<\/p>\n
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