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.
Other Considerations
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.
Conclusion
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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.