Skip to main content

You are here

Annual Reporting and Disclosure Proposed Amendments — Issued Jointly by DOL, IRS and PBGC!

Susan Diehl

On July 21, 2016 the Department of Labor (DOL) issued proposed amendments to the Form 5500 series in a ‘Notice of Proposed Forms Revisions’ (NPFR) it prepared jointly with the IRS and the Pension Benefit Guaranty Corporation (PBGC) (the Agencies). The proposed regulation, and related forms revisions, would improve employee benefit plan reporting for filers, the public and the Agencies.

The revision is necessary because the annual return/report forms have not kept pace with market developments and changes in the laws covering employee benefit plans, presenting problems with outdated and missing information that negatively affect the Agencies’ effective and efficient protection of employee retirement and health benefits. The proposed revisions would affect employee pension and welfare benefit plans, plan sponsors, administrators, and service providers.

Summary of the Major Revisions

While many of the suggested changes will require employers to report a lot more information, remember that the agencies are also looking for a form that permits what they call “data mining”, obviously to provide the agencies as well as Congress and the private sector with more useful information that will be collected in the future on plans, especially regarding investments.

The proposed forms revisions also include comments from 15 reports from GAO, TIGTA and the ERISA Advisory Council.

There are five major goals of the project:

1. Modernize financial and investment reporting by retirement plans.
2. Enhance accessibility and usability of the data.
3. Update reporting requirements for service provider fee and expense information.
4. Require reporting by all group health plans covered under Title I of ERISA.
5. Improve compliance through new questions on plan operations and financial management of the plan.

The proposed changes to financial reporting are specifically designed to improve reporting of alternative investments, hard-to-value assets, and investments through collective investment vehicles and participant-directed brokerage accounts.

Schedule I would be eliminated, so if the employer cannot file the Form 5500-SF then they will be required to complete the full Schedule H. Small plans would still be able to qualify for the small plan audit waiver. The investment information requested would also include identifiers that are already used in the industry such as CUSIP, CIK and LEI codes.

The agencies also believe that harmonizing the reporting of service provider fees would provide a powerful tool for improved evaluation of investment, recordkeeping and administrative fees and service arrangements

Defined Contribution Plans would attach the 404a-5 comparison chart to Schedule H or to the 5500-SF. Instructions would be clarified on the reporting of the fees, including travel reimbursement.

The new data collection for characteristics that plans have would be streamlined with questions vs. the current number codes and would permit the data mining of key plan service providers.

For an audited plan (over 100 participants) the limited scope audit requirements would change to require a separate written declaration by the bank or insurance company to certify the accuracy and completeness of the information being provided by a written declaration which is signed by a person authorized to represent the bank or insurance carrier. The proposed amendment would require that the certification:

  • appear on a separate document from the list of plan assets covered by the certification;

  • identify the bank or insurance company holding those plan assets that are the subject of the certification;

  • describe the manner in which the bank or insurance company is holding the assets covered by the certification;

  • state whether the bank or insurance company is providing current value information regarding the certification; and

  • if it is being provided by an agent on behalf of the bank or insurance company, include a statement certifying that the person providing the certification is an authorized agent acting on behalf of the bank or insurance company and affirming that the bank or insurance company is taking responsibility for the accuracy and completeness of the certification and the underlying records used as a basis for the information being certified.

One Bright Note

One of the revisions is also to count participants that have an account balance vs. all those that are eligible. This will certainly help 403(b) plans in being viewed as a large plan and being subject to a costly audit!

These changes are a few years away, and comments are due by Dec/ 5. The ARA is currently drafting a letter on the proposed changes, if your organization has any comments that you would like to send on the new forms and schedules please email those comments to Ray Harmon at

Susan D. Diehl, CPC, QPA, ERPA, is President, PenServ Plan Services, Inc. and Chair of the NTSA Communications Committee.

Opinions expressed are those of the author, and do not necessarily reflect the views of NTSA or its members.