Plan reporting controversy.


The Department of Labor has proposed revising form 5500 to reduce the reporting requirements for plan sponsors. Sponsors still would have to maintain the same information as before and make it available on demand but would not have to attach it to the form. Pension rights advocates are protesting what they see as a loss of information. Rebecca J. Miller, a member of the AICPA employee benefit plans committee, spoke with the Journal about the pros and cons of each side's position.

"On the committee, we agree that plan participants need access to meaningful information. But in most plans, some of this information is not particularly meaningful," said Miller, referring to two schedules the DOL proposed to eliminate. One is the schedule of assets held for investment purposes -- this applies to large plans subject to audits. "Such plans already have to disclose in footnotes any assets representing at least 5% of the plan," she said. Although, theoretically, a highly diversified plan could have no assets in this category, Miller said this probably would be rare.

The second schedule is for reportable transactions, which essentially says that if there are any purchases or sales of an investment type where the transaction is more than 5% of the asset value, that transaction must be disclosed. Miller said this information would be obvious in a participant-directed 401 (k), for example, but not necessarily in other plans. "However, auditors would look for this in a full-scope audit. Although a limited-scope audit would not cover this area, presumably fiduciaries under the Employee Retirement Income...

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