On October 17, 2014, the Internal Revenue Service published a guide entitled “Retirement Plan Reporting and Disclosure Requirements Guide.” The Service states that the Guide is intended to be a quick reference tool to assist plan sponsors and administrators and is to be used in conjunction with the Department of Labor’s “DOL Retirement Plan Reporting and Disclosure Guide” [sic]. The DOL Guide was last updated in August 2013 and is actually called “Reporting and Disclosure Guide for Employee Benefit Plans”.
The IRS Guide covers twenty-five basic notices and disclosures, and, of course, not all of them would pertain to a particular plan. The type of plan determines the number and frequency of participant notices/disclosures. The IRS Guide addresses eleven possible reports, and, as with disclosure, the requirement for reporting depends on the nature of the plan.
The DOL’s Guide identifies thirty-three possible disclosures including both Department of Labor and PBGC notices. It identifies nineteen possible DOL and PBGC reports. As with the IRS reports and disclosures, not all of these are required for every type of retirement plan.
According to the IRS, the IRS Guide is not intended to be an exhaustive list of reporting and disclosure items but is meant to cover certain basic reporting and disclosure requirements for retirement plans required under the Internal Revenue Code and the parts of ERISA that are administered by the Service. It, along with DOL’s Guide, demonstrate how overwhelming the compliance obligations are in just the reporting and disclosure aspect of operating a retirement plan. The regime begs for analysis of the value of all the disclosures (are they read, and, if so, are they understood?) and reports (what can the IRS, DOL and PBGC do with so many of them?).
Both Guides state that not all reports and disclosures are listed. This fact, along with the myriad items that are listed, suggests that the reporting and disclosure regime is cumbersome, inefficient and expensive. It’s time for an evaluation to determine the benefit to participants and plan sponsors in having so much information produced in so many different forms. Surely there must be ways to simplify the reporting and disclosure regimes and make the information more valuable – particularly to participants, many of whom seem overwhelmed by it all.