Proposed regulations drafted by the Department of Labor implementing changes under the SECURE Act that allow a group of plans to file a single Form 5500 annual return could be released any day now.
Based on the regulatory listing (RIN: 1210-AB97) posted on the Office of Management and Budget website, it appears the White House has completed its review of the proposed regulations, which were sent to OMB July 30. This is typically one of the last steps before a regulatory proposal is released publicly.
Under the Setting Every Community Up for Retirement Enhancement (SECURE) Act enacted in December 2019, a group of plans can file a single Form 5500. The legislation defines a group of plans as individual account plans that have the same trustee, named fiduciary, plan administrator and investment options.
While there are no details yet on what is contained in the proposed regulations, the regulatory listing notes that the principal focus of this project is under the section 202 of the SECURE Act, which requires implementation of a consolidated annual report for certain groups of similar plans by no later than Jan. 1, 2022, that should apply to Form 5500 annual return/reports for plan years beginning after Dec. 31, 2021.
The SECURE Act also eased the previous rules that had restricted multiple employer plans (MEPs) to employers that have a common interest or relationship. As such, the legislation authorized the establishment of pooled employer plans (PEPs), which are plans sponsored by pooled plan providers (PPPs) that may be joined by multiple, unrelated adopting employers.
The legislative change to the Form 5500 reporting rules is intended to help reduce aggregate administrative costs, making it easier for small employers to sponsor a retirement plan, and thus, improve retirement savings. The SECURE Act, however, did not change the rules that participating employers with more than 100 employees will still be subject to an audit.
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