Plans, Perks & Pay | Employee Benefits & Executive Compensation Blog


Blog Editors



Proposed Form 5500 overhaul requires more data, creates more litigation risks
By Jeffrey Herman on September 14, 2016 at 9:25 AM

Stack of papers with magnifying glassUPDATE (Sept. 29, 2016):
On Sept. 23, 2016, the Department of Labor announced that the deadline for submitting comments would be extended by more than two months, to Dec. 5, 2016.

The Department of Labor (DOL) — jointly with the IRS and the Pension Benefit Guaranty Corporation — has proposed major revisions to the Annual Returns/Reports under the Employee Retirement Income Security Act of 1974 (ERISA), more commonly known as Form 5500s. The proposed revisions will require plan sponsors to provide more information, some of which may open the door to litigation risks.

Generally, the changes are designed to update and modernize the information collected from employee benefit plans, improve the form’s utility as a compliance and enforcement tool and expand the “mineability” of data on the forms. Most changes will apply to plan years beginning Jan. 1, 2019, or later.

Employers and plan administrators will need to be proactive to ensure they can collect the necessary information by 2019, as benefit plans subject to ERISA will have to report a lot more types of information and in much greater detail than ever before. For example:

  • Schedule E, dedicated to employee stock ownership plans (or ESOPs), is back (it was previously eliminated);
  • Schedule G requires more detailed reporting of loans, financial transactions and prohibited transactions;
  • Schedule H requests new and more detailed financial information about retirement plans and their investments;
  • Entirely new Schedule J will collect detailed information about group health plans, such as the type of benefits, COBRA coverage, contributions, claims information and other topics; and
  • Welfare plans with fewer than 100 participants that are unfunded, fully insured or a combination of both will no longer be exempt from general filing requirements.

The information collected could potentially be used against plans by the DOL, the IRS or plan participants. For example, information about the compensation of service providers (which has been attacked recently in excessive fee litigation involving 401(k) and 403(b) plans) will be more readily available to potential litigants, as will information on prohibited transactions and claim denial histories, which could be used to support claims of bias or procedural irregularities in benefit disputes.

Comments on the proposal are due by Oct. 4, 2016. They can be submitted online at (refer to “RIN 1210-AB63”), by email to (include the RIN number in the subject line), or by mail or hand delivery to:

Office of Regulations and Interpretations
Employee Benefits Security Administration
Attn: RIN 1210-AB63
Annual Reporting and Disclosure, Room N-5655
U.S. Department of Labor
200 Constitution Avenue NW.
Washington, DC 20210

Facebook Twitter LinkedIn Google+ Email

This website uses cookies to improve functionality and performance. If you choose to continue browsing this website, you consent to the use of cookies. Read our Privacy Policy here for details.