Benefits Byte

September 27, 2021

Agencies Propose Guidance on Form 5500 Reporting Requirements

Under newly proposed rules and forms revisions issued by the Biden administration, retirement plan sponsors and administrators would be required to provide extensive new information in their annual filings with the government, especially for those sponsoring multiple-employer arrangements. Although the rules are primarily focused on retirement plans, they do propose certain changes for multiple employer welfare arrangements (MEWAs) as well.

On September 14, the U.S. Department of Labor (DOL), Internal Revenue Service (IRS) and Pension Benefit Guaranty Corporation (PBGC) jointly released a Notice of Proposed Forms Revisions (NPFR) to Form 5500 to implement statutory changes included in the SECURE Act, among other changes. DOL also released a Notice of Proposed Rulemaking (NPRM) to conform its reporting regulations to the proposed Form 5500 revisions. 

The Form 5500 is filed by benefit plans to satisfy the annual disclosure requirements of ERISA and the Internal Revenue Code. It is also the primary source of information for both the federal government and the private sector on retirement plan assets.

In the final months of the Obama administration, DOL proposed a series of sweeping changes to the Form 5500 series, regarding which the Council filed written comments on May 31 and December 5, 2016. (See the June 1, 2016, and December 7, 2016, Benefits Bytes.) At that time the Council expressed serious concerns with the proposed changes, which would likely have been viewed as burdensome for plans and plan administrators.

Although these proposed changes were never finalized, some are included in the newly released NPFR. A detailed summary, prepared by Davis and Harman, LLP, and now available for Council members, provides details and key takeaways on the guidance. Briefly, the NPFR would:

  • Implement Section 202 of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which directs DOL and IRS to develop a new aggregate annual reporting option for certain groups of structurally identical defined contribution plans (a “defined contribution group,” or DCG), including by introducing new Schedule DCG to collect plan-level information for plans covered by a DCG consolidated Form 5500 filing.
  • Add a new schedule for Multiple Employer Plans (MEPs) to further implement Section 101 of the SECURE Act, which provides for pooled employer plans (PEPs) and requires additional Form 5500 reporting by MEPs, including PEPs.
  • Standardize the schedules of investment assets reported on Schedule H.
  • Modify the method for counting participants for purposes of determining when a defined contribution plan may file as a small plan.
  • Add numerous questions to the Form 5500, including with respect to information about the plan’s trust and IRS compliance questions and modify the information required from defined benefit plans.
  • Impose certain changes on Form M-1 and Form 5500 reporting for MEWAs. (See this separate summary, provided courtesy of Davis and Harman, LLP.)

In addition to conforming DOL’s regulations to the above changes, the NPRM proposes changes to the summary annual report (SAR) to reflect the new DCG arrangements and new Schedules DCG and MEP. The NPRM has been determined to be “economically significant” under Executive Order 12866 by reason of raising novel legal or policy issues arising out of legal mandates.

The proposed amendments would apply to reporting for plan years beginning on or after January 1, 2022. However, the proposed amendments implementing changes to Section 103(g) of ERISA — expanding the participating employer information reported by MEPs — would apply to plan years beginning on or after January 1, 2021.

DOL has indicated that there will likely be additional Form 5500 changes proposed in the future.

Comments on the NPFR and NPRM are due November 1, 2021. For more information or to provide input for future Council comments, please contact Lynn Dudley, senior vice president, global retirement & compensation policy, or Diann Howland, vice president, legislative affairs.