SAR Steps

If you administer a plan with over 100 participants, the deadline is approaching for providing those participants with one of the required documents, a Summary Annual Report (SAR).

Under ERISA, all employee plan participants are required to receive multiple documents about both their retirement plans and group health plans. If you administer a plan with over 100 participants, the deadline is approaching for providing those participants with one of the required documents, a Summary Annual Report (SAR). SARs are required each year for pension plans, including 401(k) plans, and welfare plans, unless such a plan is exempt from filing Form 5500.

SAR’s follow the same distribution requirements as do plan Summary Plan Description, meaning that they must be given to all those employees who have satisfied the 401(k) plan’s eligibility requirements, even if that employee has not made any elective deferrals. A participant is also classified as beneficiary who is receiving payments from the plan, and an alternate payee receiving payments from the plan under a qualified domestic relations order (QDRO) is treated as a beneficiary.

The Summary Annual Report is a financial report card of sorts. it provides a summary of the information filed in the ERISA plan’s Annual Report, the Form 5500 filing. The required content for SARs is set out in DOL regulations. It is required nine months after the end of the plan fiscal year for which the Form 5500 is filed, two months after Forms 5500 is due. Therefore, for a calendar-year plan for which the Form 5500 was due by July 31, the SAR must be provided on or before September 30. But, if the plan has received an extension for filing the Form 5500, the deadline for the SAR is also extended.

Insured health plans are also required to provide annual SARs to plan participants but generally not to spouses or children who are beneficiaries. Additional SARs must be distributed to employees, spouses, or dependent children who elect COBRA would be considered participants for this purpose, as would alternate recipients under qualified medical child support orders (QMCSOs).