Proposed regulations to implement changes under the SECURE Act that allow a group of plans to file a single Form 5500 annual return are nearing public release.
According to the regulatory listing posted on the White Houses Office of Management and Budget’s website, the Department of Labor sent the proposed regulations to the OMB on July 30.
The proposal will now undergo a review at OMB before being released for a public comment period. The OMB generally has up to 90 days to vet the request and either approve it for release or send it back for modifications, but there is no minimum period for review.
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 no details are provided on what is contained in the proposed regulations, the regulatory listing notes that the principal focus of this project is under 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.
