DOL, IRS and PBGC Call for Comments on Form 5500 Revisions

The U.S. Department of Labor (DOL), via the Employee Benefits Security Administration (EBSA), has joined the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation (PBGC) in requesting public comments on proposed revisions to the Form 5500 Annual Return/Report. At the same time, EBSA is publishing a notice of proposed changes to its implementing regulations under Title I of the Employee Retirement Income Security Act (ERISA).

The Form 5500 is one of the key annual filings made by private-sector employee benefit plans, and the EBSA says it now needs changes, primarily to implement provisions of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.

The proposed changes also include a limited number of other improvements to the annual return/report forms and instructions, says Acting Assistant Secretary for Employee Benefits Security Ali Khawar.

“The proposed form changes and related regulatory amendments address Setting Every Community Up for Retirement Enhancement Act changes, especially for multiple employer plans [MEPs], and improve this critical enforcement, research and public disclosure tool,” Khawar says. “The proposed changes would support the agencies’ oversight of employee benefit plans, provide better public access to Form 5500 data and allow interested private sector and other governmental stakeholders to expand their use of Form 5500 data in ways that help plan sponsors, fiduciaries and participants and beneficiaries understand their plans and plan investments better.”

The key proposed revisions and the proposed changes to the department’s implementing regulations would do the following:

• Modify the Form 5500 Annual Return/Report and the department’s regulations to implement the SECURE Act requirement for the DOL and the Department of the Treasury to develop a consolidated annual report for groups of defined contribution (DC) retirement plans. Specifically, the proposal would establish a new type of direct filing entity called a Defined Contribution Group (DCG) Reporting Arrangement and add a new Schedule DCG (Individual Plan Information) that such reporting groups must file, in addition to meeting more generally applicable Form 5500 requirements for large pension plans.

• Modify the Form 5500 Annual Return/Report to reflect pooled employer plans (PEPs) as a new type of retirement plan and implement SECURE Act changes to MEP reporting of participating employer information by establishing a new Schedule MEP (Multiple Employer Retirement Plan Information). Additionally, for multiple employer welfare plans that provide medical benefits, the proposal would move the questions regarding participating employers that are currently part of the Form 5500 Annual Return/Report to the Form M-1 and apply that reporting requirement to non-plan entities that file the Form M-1.

• Improve financial reporting for retirement plans in general, including PEPs, other MEPs and the new DCG reporting arrangements. The proposed improvements would add new fee and expense reporting requirements and enhance the format and content of the existing schedules of assets held for investment.

• Expand the number of DC pension plans that would be eligible for small plan simplified reporting options, including the conditional waiver of the independent qualified public accountant annual audit.

• Add questions to improve financial and funding reporting by PBGC-covered defined benefit (DB) pension plans and to improve oversight and compliance of tax-qualified retirement plans.

According to the EBSA, the Form 5500 Annual Return/Report serves as the principal source of information and data available to the agencies concerning the operations, funding and investments of more than 800,000 pension and welfare benefit plans that file the annual return/report.

The publication of the proposals starts a 45-day comment period. The DOL says it will treat public comments submitted in response to this Notice of Proposed Forms Revisions as public comments on the Notice of Proposed Rulemaking—and vice versa.

Information about filing comments is available here.