The AICPA is urging four federal agencies to reconsider some of the changes they jointly proposed to Form 5500, which employers use to satisfy employee benefit plan reporting requirements under the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA).
The proposed changes are part of a federal effort to improve employers' reporting and data about employee benefit plans, and improve compliance under the Code and ERISA.
Proposed Revision of Annual Information Return/Reports (RIN1210—AB63) describes the intended changes to Form 5500, which were proposed jointly by the Department of Labor (DOL), the Department of the Treasury, the IRS, and the Pension Benefit Guaranty Corp.
In two comment letters sent to the DOL, the AICPA expressed support for many of the proposed changes but said some of them would create inconsistencies and confusion about the reporting requirements. The comment letters are available on the AICPA website.
The AICPA wrote that the proposed changes will require plans to spend more time and effort requesting and collecting information and making sure it is properly reported. The proposal also would lead to more time spent performing work on new information required to be reported in the supplemental schedules, and more time drafting audit-related disclosures on Schedule H, according to the AICPA.
In addition, the AICPA is concerned that plan sponsors may:
- Pass on the additional expenses to plan participants.
- Attempt to save costs by preparing forms on their own or choosing providers who have little or no experience.
- Discontinue plan sponsorship or reduce the level of benefits provided.
The AICPA is urging the federal agencies to hold public hearings on the proposal before the revised forms are finalized. Some of the AICPA's additional topics of concern include:
- Disclosing the audit engagement partner on Schedule H.
- Peer review disclosure.
- Group health plan information on Schedule J.