Form 5500 Schedule C: Thresholds, Deadlines, and Penalties

Form 5500 Schedule C filing requirements apply to large employee benefit plans, generally those with 100 or more participants at the start of the plan year. Schedule C is where the plan discloses every person or firm that received $5,000 or more in total compensation for services during the plan year, covering direct fees, indirect payments such as 12b-1 fees and soft-dollar arrangements, and any provider who refused to disclose its compensation. It is filed as part of the Form 5500 package, electronically through EFAST2, by the last day of the seventh month after the plan year ends.¹

Which Plans Have to File Schedule C

The threshold is 100 participants counted at the beginning of the plan year. Cross it, and the plan files as a large plan and must include Schedule C with its Form 5500. Plans under 100 participants generally file the simplified Form 5500-SF and skip Schedule C entirely.²

The rule reaches both retirement plans and welfare benefit plans, including group health plans, once they cross the large-plan line. Certain Direct Filing Entities file Schedule C regardless of participant count.¹

The 80 to 120 Participant Rule

Plans hovering near the 100-participant line get a break. If the plan had between 80 and 120 participants at the start of the current year and filed as a small plan the previous year, it can keep filing in that same category. Once the plan crosses 120 participants or otherwise no longer qualifies under the prior year’s filing status, it files as a large plan and Schedule C becomes mandatory.³

The $5,000 Threshold and What Gets Reported

Part I of Schedule C requires the plan administrator to report every person or firm that received $5,000 or more in total compensation for services to the plan during the plan year. Total compensation means direct and indirect payments combined, and it includes anything of monetary value, not just cash.⁴

For each qualifying provider, the form asks for the provider’s name, Employer Identification Number, and business address. The administrator reports the dollar amount of direct compensation, flags whether the provider received indirect compensation, and assigns service and compensation codes that categorize what the provider did and how it was paid.⁵

Direct Compensation

Direct compensation is fees paid out of plan assets to the provider for services such as recordkeeping, legal work, or plan administration. The administrator knows exactly what was paid because the plan wrote the check.

Indirect Compensation

Indirect compensation covers payments a provider receives from sources other than the plan or plan sponsor, where the payment is tied to services rendered to the plan or transactions involving the plan. Common examples include 12b-1 distribution fees from mutual funds, finder’s fees or referral commissions paid between providers, soft-dollar arrangements, float revenue, and brokerage commissions on plan transactions.⁶

One boundary catches administrators off guard. Ordinary fund operating expenses charged against an investment fund, such as the fund’s own attorney fees or accounting costs, are generally not reportable indirect compensation for Schedule C purposes. The DOL distinguishes fees tied to the plan relationship from routine expenses every fund shareholder bears.⁶

The Eligible Indirect Compensation Shortcut

Not every provider receiving indirect compensation needs to be listed on the detailed line-by-line entries of Part I, Line 2. If a provider received only what the instructions call eligible indirect compensation (EIC), the administrator can use a simpler alternative reporting method under Part I, Line 1.

EIC includes fees charged against investment funds and reflected in the fund’s net asset value, finder’s fees, soft-dollar revenue, float revenue, and brokerage commissions on plan transactions that were not paid directly by the plan or sponsor. To use the alternative, the administrator must have received written disclosures identifying the compensation, describing the services it paid for, stating the amount or the formula used to calculate it, and naming who paid and received it.³

If a provider received any direct compensation or any non-eligible indirect compensation on top of the EIC, the alternative is off the table for that provider, and the administrator must report full compensation on Line 2.³

Service and Compensation Codes

Every provider listed on Schedule C gets at least one two-digit code identifying the nature of the service and how compensation was paid. Service codes (10 through 49) describe what the provider did. Compensation codes (50 through 58) describe how the provider was paid. A single provider can carry multiple codes if it wore several hats or received multiple types of payment.³

Commonly used service codes include:

10 — Accounting and auditing
11 — Actuarial
15 — Recordkeeping and information management
22 — Insurance agents and brokers
27 — Investment advisory (plan)
28 — Investment management
29 — Legal

On the compensation side, code 50 covers direct payments from the plan, codes 51 and 52 distinguish between investment management fees paid directly and indirectly, and codes 53 through 58 cover items such as insurance brokerage commissions, sales loads, non-monetary compensation, and redemption fees. The DOL uses these codes to spot patterns across filings, and miscoding can flag a plan for review.

Reporting Providers Who Won’t Disclose

Part II of Schedule C handles a specific problem: service providers that refuse to hand over the compensation and fee information the administrator needs. Under the ERISA section 408(b)(2) regulations, covered service providers must disclose their compensation arrangements, including direct and indirect fees, in writing before or at the start of a service contract.⁷

When a provider fails to make those disclosures, the plan fiduciary must request the missing information in writing. If the provider still does not comply, the fiduciary must notify the DOL. Part II is where that notification happens: the administrator lists the name and EIN of the non-compliant provider and describes what information was withheld.⁸

Skipping Part II when a provider has been uncooperative can expose the fiduciary to claims of breaching their duty and may cause the entire Form 5500 to be treated as incomplete.

When Schedule C Is Due

Form 5500, including Schedule C, is due by the last day of the seventh month after the plan year ends. For calendar-year plans, that is July 31. Schedule C cannot be filed separately; it travels with the rest of the Form 5500 package.²

If the plan needs more time, the administrator can file IRS Form 5558 to get a one-time extension of two and a half months. For a calendar-year plan, that pushes the deadline to October 15. Form 5558 must be filed with the IRS before the original due date passes.⁹

Gathering indirect compensation data is one of the most common reasons plans need extensions. Providers who receive eligible indirect compensation from investment funds sometimes do not produce their fee disclosures until well after the plan year closes. Starting the data-collection process two to three months before the filing deadline avoids a last-minute scramble.

Penalties for Late or Incomplete Filings

Missing the Form 5500 deadline carries penalties from two different agencies. The DOL can assess a civil penalty of up to $2,739 per day for each day the filing is overdue, with no statutory cap on the total. The penalty begins accruing the day after the deadline passes and continues until the filing is submitted or a settlement is reached. The IRS has its own penalty under Internal Revenue Code section 6652(e): $250 per day, up to a maximum of $150,000 per return. Reasonable cause is a defense to the IRS penalty, but the bar is high.¹⁰

The Delinquent Filer Voluntary Compliance Program

Plans that discover they missed a filing before the DOL contacts them can use the Delinquent Filer Voluntary Compliance Program (DFVCP) to sharply reduce the exposure. The basic DFVCP penalty is $10 per day, with caps that depend on plan size:¹¹

Small plans: $750 per filing, $1,500 per plan, reduced to $750 per plan for 501(c)(3) sponsors
Large plans: $2,000 per filing, $4,000 per plan

The program is available only to administrators who have not yet received a DOL notice of intent to assess a penalty. It does not cover amended filings or Form 5500-EZ filers, and it does not eliminate any IRS penalties that may apply separately.¹¹

Filing Electronically Through EFAST2

All Form 5500 filings, including Schedule C, must be submitted electronically through the DOL’s EFAST2 filing system. Paper submissions are not accepted. A plan official must provide an electronic signature certifying the accuracy of the data before the filing can be transmitted.¹²

Once EFAST2 accepts the filing, the system generates a receipt confirmation. Keep it as part of the plan’s permanent records. It serves as proof of timely filing if the DOL or IRS ever questions whether the deadline was met.¹³

Amending a Previously Filed Schedule C

If you discover an error on a Schedule C after it has been filed and accepted, refile the entire Form 5500, not just the corrected schedule. Check the amended return/report box in Part I of the form, make the corrections to Schedule C, and resubmit the complete package with all required schedules and attachments through EFAST2.¹⁴

Correcting errors promptly reduces the risk of DOL scrutiny, particularly where a provider’s compensation was misreported or omitted in a way that could raise fiduciary concerns.

1
U.S. Department of Labor. Schedule C (Form 5500) Service Provider Information
2
U.S. Department of Labor. Form 5500 Series
3
U.S. Department of Labor. Instructions for Form 5500 Annual Return/Report of Employee Benefit Plan
4
U.S. Department of Labor. 2025 Schedule C (Form 5500)
5
U.S. Department of Labor. 2022 Schedule C (Form 5500) – Service Provider Information
6
U.S. Department of Labor. Frequently Asked Questions about the 2009 Form 5500 Schedule C
7
eCFR. 29 CFR 2550.408b-2 – General Statutory Exemption for Services or Office Space
8
U.S. Department of Labor. Fact Sheet – Service Provider Disclosure Regulation
9
Internal Revenue Service. About Form 5558, Application for Extension of Time to File Certain Employee Plan Returns
10
Office of the Law Revision Counsel. 26 U.S. Code 6652 – Failure to File Certain Information Returns
11
U.S. Department of Labor. Delinquent Filer Voluntary Compliance Program
12
U.S. Department of Labor. Welcome – EFAST2 Filing
13
U.S. Department of Labor. FAQs on EFAST2 Electronic Filing System
14
U.S. Department of Labor. EFAST2 Form 5500 and Form 5500-SF Filing Tips