A 401(k) or other defined contribution plan is a large plan for Form 5500 when it has 100 or more participants with an account balance at the start of the plan year; a defined benefit plan counts all participants. A large plan files the full Form 5500 with Schedule H and an audit. A small plan files Form 5500-SF if eligible, usually with no audit.
One count, taken on the first day of the plan year. The instructions say a return for a plan that “covered fewer than 100 participants as of the beginning of the plan year” is completed as a small plan, and one that covered 100 or more as a large plan.[1] Which participants count depends on the kind of plan:
The category decides the form, the financial schedule, and whether an independent accountant’s report is attached.[1][4][7]
Being small is necessary but not enough. The Form 5500-SF instructions allow it only where every one of these is true:[4]
A small plan that misses any of these files the full Form 5500 with Schedule I instead.[4][7]
It lets a plan near the line repeat last year’s category. “If a plan has between 80 and 120 participants (inclusive) as of the beginning of the plan year, the plan administrator may elect to file the same category of annual report” that was filed for the previous plan year.[2] It runs both ways, and it needs a prior return to repeat, so a plan in its first year cannot use it.[1] At the edges, using participants with an account balance at the start of the year:
The threshold is still 100 participants with an account balance, not 120. The election only postpones the change for a plan that was already small. The audit requirement checker applies the same table to a plan’s own numbers.
Yes. The waiver of the accountant’s report is conditional. Under 29 CFR 2520.104-46 a small pension plan skips the audit only if, for the year, at least 95% of its assets are qualifying plan assets or anyone handling the rest is bonded for at least their value, and the summary annual report names the institutions holding the assets and tells participants they may see the statements and the bond.[5] Qualifying plan assets include assets held by banks, insurers, registered broker-dealers, mutual fund shares, participant loans, and participant-directed accounts reported on by a regulated institution.[5] A small plan that fails these conditions attaches an accountant’s report to a Form 5500 with Schedule I.[7] The fidelity bond calculator sizes the ordinary ERISA bond.
A short plan year can move the audit, not the category. When one of two consecutive plan years is seven months or less, because the plan started, merged, terminated or changed its plan year, the accountant’s report for the first year may be deferred to the second year’s return, which then covers both.[6] A plan that deferred must file the second year as a large plan, whatever its count that year.[1]
Some plans sit outside both categories. Governmental plans, church plans that have not elected ERISA coverage, and 403(b) arrangements not established or maintained by an employer under 29 CFR 2510.3-2(f) file no Form 5500, and so need no audit.[7] SIMPLE IRA plans and conforming SEPs do not file either. A one-participant plan covering only owners and their spouses files Form 5500-EZ, if it files at all.[7]
The return changes shape and gains an audit. Schedule H replaces the short form’s financial lines, Schedule C reports any service provider paid $5,000 or more, and the independent accountant’s report is attached.[7] The audit has to be done before the return is filed, which makes the deadline tighter: see Form 5500 deadlines and Form 5558 extensions and the deadline calculator. For the work itself, see what a 401(k) audit asks for, the ERISA 103(a)(3)(C) audit, and what plans paid for their audits.
Last reviewed November 3, 2026, against the 2025 Form 5500 and Form 5500-SF instructions. Rechecked every January.
A large plan generally covers 100 or more participants at the beginning of the plan year, counting participants with an account balance for a defined contribution plan. It files the full Form 5500 with Schedule H and an independent accountant's audit report. A small plan generally covers fewer than 100, files Form 5500-SF if eligible or Form 5500 with Schedule I, and is not audited if it meets the waiver conditions.
A small plan, or one filing as small under the 80 to 120 rule, that held no employer securities, kept 100% of its assets in eligible plan assets with a readily determinable fair value, qualifies for the audit waiver without relying on enhanced bonding, and is not a multiemployer plan, a pooled employer plan, an ESOP, a plan required to file Form M-1, or part of a DCG reporting arrangement.
Yes. The small plan audit waiver in 29 CFR 2520.104-46 is conditional. At least 95% of the plan's assets must be qualifying plan assets, or anyone handling the rest must be bonded for at least their value, and the summary annual report must carry the required disclosures. A small plan that fails those conditions files Form 5500 with Schedule I and attaches an accountant's report.
100 participants with an account balance is the line. A plan that filed as a small plan last year may keep filing small up to 120 under the 80 to 120 rule in 29 CFR 2520.103-1(d), which is why 120 is often quoted. At 121 the election is gone.
Below 80 at the start of the year, yes: it files as a small plan. Between 80 and 99, a plan that filed large last year may either file small or elect to keep filing large under the 80 to 120 rule.