The U.S. Department of Labor (DOL) has announced a two-month extension of the comment period on the Form 5500 Modernization Proposals floated earlier this year.
By way of background, the DOL, the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation (PBGC) published a Notice of Proposed Revision of Annual Information Return/Reports in the Federal Register on July 21, 2016. The DOL also published a separate, but related Notice of Proposed Rulemaking on the same day.
According to the regulators, the revisions and regulatory amendments were proposed as part of a project to improve and modernize Form 5500 annual return/reports filed by employee benefit plans. The revisions and regulatory amendments generally are being coordinated with a re-compete of the contract for the ERISA Filing Acceptance System II, the “wholly electronic system, commonly known as EFAST2, that is operated by a private-sector contractor for the processing of Form 5500/5500-SF return/reports.”
A range of stakeholder groups asked for an extension of time to submit comments given the scope and significance of the proposed forms revisions and regulatory amendments. As attendees of the PLANADVISER National Conference heard during the Washington Insights panel discussion, the proposed changes to the Form 5500 are expected to give an unprecedented amount of public access to searchable plan data. The current Form 5500 system data may be available to the public in a limited way, but under the proposed changes anyone would be able to access, mine and closely analyze raw retirement plan data covering everything from the investment expenses to recordkeeping fees, product holdings and more. In short, it’s the kind of information source that plaintiffs’ attorneys really would like to get their hands on, and crucially the Form 5500 data will generally be devoid of contextualizing information about the level and value of services performed for given amounts of fees. ERISA attorneys at the PLANADVISER conference warned this could easily lead to a rash of new litigation.
According to DOL, IRS and PBGC, the new deadline for submitting comments has been extended from October 4, 2016, to the new date of December 5, 2016. The result will be a total of almost five months for interested persons to prepare and submit comments.
“This step is intended to facilitate robust and thoughtful public input on the proposals while respecting the need to keep the rulemaking aspects of the project moving forward and on pace with procurement and system development objectives to recompete the contract acquisition plan,” the regulators explain.