Several categories of employee benefit plans are exempt from filing Form 5500. The list is short and the conditions are strict, but if you are asking who is exempt from filing Form 5500, the answer runs to seven groups: small welfare plans with fewer than 100 participants, governmental plans, church plans that have not elected ERISA coverage, SEP and SIMPLE IRA arrangements, one-participant retirement plans with combined assets of $250,000 or less, top hat plans that submit a one-time notice to the Department of Labor, unfunded excess benefit plans, and plans maintained outside the United States primarily for nonresident aliens. Each exemption comes with structural requirements, and losing one can pull the plan into both DOL and IRS penalty regimes.
Small Welfare Benefit Plans Under 100 Participants
Welfare plans that cover fewer than 100 participants at the beginning of the plan year are exempt from filing Form 5500, provided the plan is unfunded, fully insured, or a combination of the two.1eCFR. 29 CFR 2520.104-20 – Limited Exemption for Certain Small Welfare Plans These are plans that provide benefits like health, dental, life, or disability insurance. Unfunded means benefits are paid from the employer’s general assets; fully insured means benefits are provided through insurance contracts.
If employees contribute toward premiums, the employer must forward those contributions to the insurance carrier within three months of receiving them. The regulation says three months, not 90 days, so a month with 31 days does not shave the window.1eCFR. 29 CFR 2520.104-20 – Limited Exemption for Certain Small Welfare Plans If the employer holds plan assets in a separate trust rather than paying benefits directly, the exemption generally does not apply.
Participant count is measured only on the first day of the plan year. Starting at 75 participants and growing to 105 by year-end does not break the exemption, because the threshold was met at the beginning.1eCFR. 29 CFR 2520.104-20 – Limited Exemption for Certain Small Welfare Plans One boundary worth naming: this exemption only removes the annual reporting duty. Other ERISA disclosures, including the Summary Plan Description owed to participants, still apply.
Governmental and Church Plans
Plans established by federal, state, or local government entities are exempt from ERISA Title I entirely, which sweeps in all Form 5500 filing obligations. The same treatment covers plans maintained by Indian tribal governments performing essential governmental functions. The statute defines “governmental plan” broadly to include any plan maintained by an agency or instrumentality of any level of government.2Office of the Law Revision Counsel. 29 USC 1002 – Definitions
Church plans receive a parallel carve-out under ERISA Section 4(b)(2), so long as the church has not made an irrevocable election to be covered by ERISA under Internal Revenue Code Section 410(d).3Office of the Law Revision Counsel. 29 USC 1003 – Coverage A qualifying church plan must be established and maintained by a church, a convention of churches, or an organization controlled by or associated with a church that is tax-exempt under IRC Section 501.2Office of the Law Revision Counsel. 29 USC 1002 – Definitions The 410(d) election is permanent; a church that opts in cannot later opt back out.
The common way religious employers lose the exemption is by extending a plan to employees of a for-profit subsidiary or affiliated entity that does not itself qualify as a church. At that point the plan may fall outside the statutory definition, and standard ERISA reporting applies.
SEP and SIMPLE IRA Plans
Simplified Employee Pensions and SIMPLE IRAs skip standard Form 5500 filing. For SEPs created using IRS Form 5305-SEP, the DOL provides an alternative compliance path under 29 CFR 2520.104-48: rather than filing annual reports, the employer satisfies ERISA reporting by giving certain written disclosures directly to participants.4eCFR. 29 CFR 2520.104-48 – Alternative Method of Compliance for Model Simplified Employee Pensions Non-model SEPs follow a similar route under 29 CFR 2520.104-49, which requires the employer to furnish written information about participation, contribution formula, and withdrawal rules.5eCFR. 29 CFR 2520.104-49 – Alternative Method of Compliance for Certain Simplified Employee Pensions
SIMPLE IRAs are IRA-based arrangements and are not treated as employer-sponsored plans subject to Form 5500. The practical result is that employers offering SEPs or SIMPLE IRAs avoid annual filing costs and audit requirements entirely. That reporting exemption is part of why these plans exist as a low-overhead option for smaller employers.
One-Participant (Solo 401(k)) Plans Under $250,000
One-participant plans, often called Solo 401(k)s, are exempt from filing Form 5500 when the combined total assets of all one-participant plans maintained by the same employer are $250,000 or less at the end of the plan year.6Internal Revenue Service. Financial Advisors Are Assets in Your Clients One Participant Plans More Than 250000 The plan must cover only a business owner (or partners) and their spouses who wholly own the trade or business.
Watch the aggregation rule. The $250,000 threshold is not per plan. If you maintain two one-participant plans and their combined assets exceed $250,000, you must file Form 5500-EZ (or Form 5500-SF with the one-participant box checked) for each plan.6Internal Revenue Service. Financial Advisors Are Assets in Your Clients One Participant Plans More Than 250000 The IRS has flagged this as one of the most frequent compliance errors for solo plan sponsors.
There is one situation where asset size no longer matters: the final plan year. When you terminate a one-participant plan and distribute all assets, you must file a final return marking the distribution complete, regardless of how small the plan is.7IRS. 2025 Instructions for Form 5500-EZ That final return is a common oversight and can generate penalties years down the road.
Top Hat Plans
Top hat plans provide deferred compensation to a select group of management or highly compensated employees. Rather than filing Form 5500 each year, the plan administrator satisfies ERISA reporting by submitting a one-time statement to the Department of Labor within 120 days of the plan becoming subject to ERISA.8eCFR. 29 CFR 2520.104-23 – Alternative Method of Compliance for Pension Plans for Certain Selected Employees The statement identifies the employer, the number of plans, and the number of employees in each.
The DOL accepts this filing electronically through its EBSA Top Hat Plan Statements Online Filing System.9U.S. Department of Labor / Employee Benefits Security Administration. Top Hat Plan Statements Online Filing System Missing the 120-day window can strip the plan of its alternative compliance status and force full annual reporting.
The plan must also remain unfunded, meaning benefits are paid from the employer’s general corporate assets. If the employer sets aside money in a trust earmarked for top hat participants, the plan can be reclassified and lose the exemption.
Unfunded Excess Benefit Plans
Excess benefit plans are unfunded arrangements maintained solely to restore benefits that exceed the limits imposed by IRC Section 415 on a tax-qualified plan. Unfunded excess benefit plans are wholly exempt from ERISA, not merely from Form 5500 reporting, so they never trigger a filing obligation in the first place.3Office of the Law Revision Counsel. 29 USC 1003 – Coverage
Plans Maintained Outside the United States for Nonresident Aliens
ERISA does not apply to employee benefit plans established and maintained outside the United States primarily for the benefit of nonresident aliens, as long as substantially all participants are nonresident aliens.3Office of the Law Revision Counsel. 29 USC 1003 – Coverage Because these plans sit entirely outside ERISA Title I, there is no Form 5500 obligation.
Multinational employers rely on this provision to run overseas benefit programs without duplicating U.S. filing requirements. The exemption depends on the plan genuinely serving a foreign workforce. If it starts covering a meaningful number of U.S. citizens or residents, the “substantially all nonresident aliens” test can fail and pull the plan into U.S. reporting.
If Your Exemption Doesn’t Apply and You’re Late
If a plan turns out not to qualify for any of the above and filings have been missed, two voluntary correction programs limit the exposure. The DOL’s Delinquent Filer Voluntary Compliance Program caps penalties at $1,500 per filing for small plans and $4,000 for large plans, with a $750 cap for small plans sponsored by 501(c)(3) tax-exempt organizations.10U.S. Department of Labor. Delinquent Filer Voluntary Compliance Program For one-participant plans filing Form 5500-EZ, the IRS runs a separate penalty relief program; sponsors can also request reasonable cause relief by attaching a signed statement to the delinquent return, but if the IRS denies reasonable cause and issues a penalty notice, the delinquent filer program is no longer available for that return.11Internal Revenue Service. Penalty Relief Program for Form 5500-EZ Late Filers Correcting through one of these programs before an audit finds the gap is almost always cheaper than waiting for enforcement.