Employers that sponsor defined benefit plans need to comply with a new requirement to post the Form 5500 actuarial information for the defined benefit plan on the employer’s intranet. The requirement means that employers should be posting the 2008 Form 5500 actuarial information this year even though the DOL has not yet issued regulations.
Intranet Posting is Part of Disclosure Changes for Defined Benefit Plans
The Pension Protection Act (the “PPA”) made a number of changes to disclosing defined benefit plan information to participants. It added a new annual funding notice, deleted the requirement that employers distribute a summary annual report, and added the requirement that employers post information from the Form 5500 (also referred to as the annual report). Section 504 of the PPA requires both the employer and the Department of Labor (“DOL”) to post actuarial information on the funding status of defined benefit plans. (The requirement also applies to multiemployer plans.) If an employer does not have an intranet, then no action is necessary. The statute only requires a posting if the employer has an intranet. (Note: If the employer maintains any type of website for its employees, this will likely be considered an intranet for purposes of the statute.)
What Must Be Posted
The statute states that the posting is to include the identification, basic plan information, and actuarial information included in the annual report (Form 5500). Based on this, it appears an employer should post Part I (identification information) and Part II (basic plan information) of Form 5500, and Schedule SB of Form 5500.
When Must It Be Posted
The statute does not address the time within which the information must be posted. Until regulations are issued, employers may make a reasonable good faith interpretation of the statute. Note: The DOL has informally indicated that it believes employers should post the information soon after submitting it. In addition, the statute requires the DOL to post the same information within 90 days after receiving it, so the DOL regulations when issued will likely require employers to post the information in less than 90 days after submitting the Form 5500.
Who Can Post It
The statute requires the plan sponsor (the employer) or plan administrator (again, generally the employer) to post the information. Because many retirement plan providers maintain websites for employer plans, one common question is whether the retirement plan provider may post the information on the website the provider maintains for the plan. The DOL has informally indicated that this does not satisfy the statute.
Although regulations have not been issued, the requirement is effective for plan years beginning after December 31, 2007. For calendar year plans, this means the employer’s first posting will be information on the 2008 Form 5500. Some questions have arisen about whether the requirement applies to 401(k) plans and other defined contribution plans. The DOL has informally indicated it does not. (The search page for actuarial information at the DOL’s website uses the plan name “Widget Factory 401K” and this may have led to some of the confusion.) The 2008 Form 5500 Instructions also indicate that employers need to post the information only for defined benefit plans (see page 2 of the 2008 Form 5500 Instructions). Some questions have also arisen on whether the employer needs to notify employees that the employer has posted the information. The statute does not require employers to provide notice that the Form 5500 information has been posted on the employer’s intranet. Finally, there are questions as to where the posting should be placed on the employer’s intranet. Until the DOL issues guidance, the employer may make a reasonable interpretation. One reasonable interpretation would be to post the information on a retirement plan, benefits, or human resources website.
Employers that sponsor defined benefit plans should post the information required under section 104(b)(5) of ERISA to be in good faith compliance with the statute. If you wish to discuss this requirement and the risks associated with failing to satisfy it, please contact the attorney in the Benefits and Compensation practice group with whom you work.