A 900-page proposal by the Department of Labor to update Form 5500 (Annual Return/Report of Employee Benefit Plan) is “overbroad and significantly exceeds the requisite information necessary or appropriate for effective… reporting,” ABA said in a comment letter today. Form 5500 — which must be filed by all private-sector employers under the Employee Retirement Income Security Act and the Internal Revenue Code — reports information about the operation, funding, assets and investments of pensions and other employee benefit plans.
While ABA supports DOL’s goal of modernizing the form to improve the content and presentation of employee benefit plan data, the association pointed out that the proposal’s numerous gaps, inconsistencies and ambiguities frustrate these goals, and would result in a final rule that is vague, burdensome and overly complex. ABA criticized the agency for failing to engage industry stakeholders in the drafting of its proposal, adding that as proposed, the rule would add implementation costs for banks with little or no benefit to plan participants and beneficiaries.
Concluding that the proposed rule more closely resembles an advance notice of proposed rulemaking rather than a true proposed rule, the association called on DOL to hold a hearing on the proposal to gain industry input and re-issue a revised proposal that provides more clarity and is better aligned with the DOL’s objectives. The plan should also be beta tested to ensure that regulatory instructions are clear and that the data requested is readily available and to confirm the accuracy of DOL’s time and cost estimates, ABA added.