Dive Brief:
- A proposed revision of data reporting requirements on employee benefits plans is expected to "improve and modernize" the current process, but a consequence could mean millions of small employers whose plans are currently "exempt" will be required file annual reports, according to SHRM.
- Under the Form 5500 update proposal, the Labor Dept., IRS and Pension Benefit Guaranty Corp. want to gather more plan data with a goal of "increasing transparency, improving data mining and modernizing reporting requirements."
- The proposed revisions, published July 21, would likely take effect in the 2019 plan year (begins in 2020), but according to critics, the employer burden would be especially harsh for small plans that are currently exempt from filing, and also drive higher costs for all employers.
Dive Insight:
Form 5500 is in play for typical benefit plans, such as medical, dental, vision, life insurance, pension and 401(k). The Labor Dept. says one idea at play is to "help plan sponsors, fiduciaries, and participants and beneficiaries better understand their plans and plan investments."
And according to a statement from Phyllis C. Borzi, assistant secretary for the Employee Benefits Security Administration, the 5500 is in "serious need of updates to continue to keep pace with changing conditions in the employee benefit plan and financial market sectors."
As is the case with so many of these updated federal compliance rules, the rule of thumb is employers need to look over their current data and begin to prepare for the potential change. The good news for employers is that the deadline isn't until 2019. Interested parties have until Oct. 4, 2016, to comment on the proposal. However, there is a chance the presidential election outcome could affect implementation.