Regulators unveil proposed changes to group Form 5500 reporting

Regulators on Tuesday issued a proposal that would allow groups of defined contribution plans to file a single Form 5500 annual return.

The Setting Every Community Up for Retirement Enhancement Act, known as the SECURE Act, which Congress passed and was signed into law in late 2019, directed the Department of Labor, IRS and Pension Benefit Guaranty Corp. to develop a consolidated annual report for groups of DC plans.

The proposal unveiled Tuesday would establish a new type of direct filing entity called a Defined Contribution Group Reporting Arrangement and add a new Schedule DCG — detailing individual plan information — that such reporting groups must file.

The Labor Department's Employee Benefits Security Administration on Tuesday also proposed changes to the Employee Retirement Income Security Act to add pooled employer plans, or PEPs, to the list of retirement plans when filing a Form 5500.

Moreover, the proposal aims to improve financial reporting by adding new fee and expense reporting requirements for retirement plans, as well as enhance the format and content of the existing schedules of assets held for investment, according to a Labor Department news release.

"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," said Ali Khawar, acting assistant secretary for EBSA, in the news release.

The Form 5500 provision in the SECURE Act was aimed at reducing administrative and cost burdens for plans. A regulatory impact analysis for the proposal estimated that the total number of filers would decrease as a result of the PEP and DCG reporting provisions by nearly 20,000 filers, according to the news release. Also, the overall reporting burdens would decrease by approximately $64.6 million annually, the Labor Department noted.

If adopted, the proposed changes generally would be effective for plan years beginning on or after Jan. 1, 2022. Forms for the 2022 plan year are filed generally beginning in July 2023, the Labor Department said.

The proposals will have a 45-day comment period.