March 23, 1989
TO: PENSION MEMBERS NO. 20-89
RE: REVISIONS TO 5500 SERIES OF FORMS
__________________________________________________________
In September 1986, the Internal Revenue Service, the
Department of Labor and the Pension Benefit Guaranty Corporation
proposed revisions to the 5500 series of forms, which are filed
annually by administrators of employee benefit plans. (See
Institute Memorandum to Pension Members No. 19-86, dated October
7, 1986.) Subsequently, the Department of Labor proposed
corresponding revisions to regulations regarding annual reporting
and disclosure. (See Institute Memorandum to Pension Members No.
8-87, dated February 3, 1987.)
Attached are copies of the final versions of the forms as
well as the final annual reporting and disclosure regulations.
The following memorandum describes the relevant changes to the
forms.
Form 5500
Items 34c(xi) (Value of interest in certain investment
arrangements) and 35b(vi) (Net investment gain (loss) from
certain investment arrangements) have been added to Form 5500 in
response to an Institute request for clarification concerning the
reporting of plan investments in registered investment companies.
(See Institute Memorandum to Pension Members No. 22-86, dated
November 10, 1986.) The instructions to Item 34c(xi) require
that the plan administrator combine the plan's interests in
common/collective trusts, pooled separate accounts, master
trusts, 103-12 IEs and registered investment companies. The plan
administrator is instructed to calculate the net investment gain
or loss in Item 35b(vi) for a particular investment as follows:
(1) the current value of the plan's interest at the end of the
plan year; (2) minus the current value at the beginning of the
plan year; (3) plus any amounts transferred out of the investment
by the plan during the plan year; and (4) minus any amounts
transferred into the investment by the plan during the plan year.
Form 5500-C
As proposed in 1986, Form 5500-C required the reporting of
only summary financial information for plans with 25 or fewer
participants and more detailed financial statements for plans
with 26 to 99 participants. The final form requires the more
detailed financial statements for all plans filing Form 5500-C.
Form 5500-R
The final Form 5500-R incorporates Items 13 and 14, which
request financial information concerning the plan. The preamble
to the notice of revision explains that the agencies believe that
the availability of such financial information will enhance their
ability to monitor the financial condition and activity of the
plans. The Form 5500-C/R triennial reporting system remains
unchanged.
Schedule C
The 1986 proposal included a new Schedule C to the 5500
series for reporting service provider and trustee information.
In its comments, the Institute recommended that the form be
eliminated or at least modified to explain more clearly the
requested information.
The agencies have elected to require Schedule C only in
connection with the filing of Form 5500. Therefore, plans with
fewer than 100 participants filing Form 5500-C will not be
required to file Schedule C.
We will keep you informed of further developments.
Kathy D. Ireland
Assistant General Counsel
Attachments