This is the accessible text file for GAO report number GAO-14-92 entitled 'Private Pensions: Clarity of Required Reports and Disclosures Could Be Improved' which was released on December 17, 2013. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. United States Government Accountability Office: GAO: Report to Congressional Requesters: November 2013: Private Pensions: Clarity of Required Reports and Disclosures Could Be Improved: GAO-14-92: GAO Highlights: Highlights of GAO-14-92, a report to congressional requesters. Why GAO Did This Study: The private sector pension system in the United States represents trillions of dollars in assets and is a key source of financial security for millions of Americans. To promote transparency and enhance retirement security, legislation and regulations require that plan sponsors provide numerous reports to Labor, IRS, and PBGC, and numerous disclosures to plan participants. GAO was asked to review this system of private sector pension plan reporting and disclosure. In this report, GAO examined (1) the reports and disclosures pension plans are required to make to government agencies and plan participants; (2) the ways, if any, reports to agencies may be inefficient or ineffective, and (3) the ways, if any, disclosures to participants may be inefficient or ineffective. In conducting this work, GAO reviewed relevant statutes and regulations; analyzed inquiries to Labor’s participant help line; assessed certain disclosures for readability when evaluated against criteria based on federal plain language guidelines; and interviewed agency officials, plan sponsor representatives, service providers, and participant advocates. What GAO Found: Sponsors of private sector pension plans are required to submit various reports to federal agencies and disclosures to participants depending on the plans’ type, size, and circumstances. GAO identified more than 130 reports and disclosures stemming from provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA), and the Internal Revenue Code, as administered largely by three ERISA agencies: the Department of Labor (Labor), Internal Revenue Service (IRS), and Pension Benefit Guaranty Corporation (PBGC). Although each plan sponsor is required to submit only certain of these reports and disclosures, determining which ones can be challenging and the agencies’ online resources to aid plan sponsors with this task are neither comprehensive nor up-to-date. Figure: Number of Routine Reports and Disclosures Required under ERISA Varies Based on Plan Characteristics: [Refer to PDF for image: illustrated list] Small defined benefit (less than 100 participants) plan sponsored by a single employer: Routine report: 4; Routine disclosure: 3; Total: 7. Large defined benefit (500+ participants) plan sponsored by a single employer: Routine report: 5; Routine disclosure: 3; Total: 8. Large defined benefit (500+ participants) plan sponsored by two or more employers: Routine report: 6; Routine disclosure: 3; Total: 9. Any defined contribution plan: Routine report: 2; Routine disclosure: 5; Total: 7. Defined contribution plan with automatic enrollment design: Routine report: 2; Routine disclosure: 7; Total: 9. Source: GAO analysis of statute and agency information. Note: Most routine reports and disclosures are required annually. [End of figure] Additional routine and nonroutine reports and disclosures may be required depending on a plan’s design and circumstances. Plan sponsors’ reports to the ERISA agencies involve minimal duplication, but the management of data on one report raised concerns. Notices that the Social Security Administration (SSA) sends to retirees listing vested benefits left behind with previous employers can be misleading, because management of the data is fragmented across three agencies and none assumes responsibility for ensuring the data are accurate. Beyond issuing the form and instructions, IRS views its role as merely to pass the data through from sponsors to SSA, SSA views its role as merely to provide retirees with whatever data SSA receives from IRS, and Labor views its role as merely to respond to retirees’ inquiries. As a result, the SSA notices can be misleading, listing benefits that have already been paid. Participant disclosures are numerous and do not always communicate effectively. Various groups GAO interviewed said that participants often find the content overwhelming and confusing. Although certain disclosures are required by law to be written in a manner calculated to be understood by the average plan participant, the three ERISA agencies acknowledged that enforcement of these provisions has not been a priority. Also, GAO found that several model notices that these agencies had developed as templates for sponsors to use in developing their disclosures fell short when evaluated against federal plain language guidelines. What GAO Recommends: GAO asks Congress to consider shifting responsibility and necessary resources to Labor for managing the pension benefit data that SSA provides to retirees. GAO also recommends that the agencies improve their online tools on reporting requirements and facilitate better readability of disclosures. In response, the agencies generally agreed with our findings and are taking steps to address the issues we identified. View GAO-14-92. For more information, contact Charles Jeszeck at (202) 512-7215 or jeszeckc@gao.gov. [End of section] Contents: Letter: Background: Required Reports and Disclosures Vary by Plan Type, Size, and Circumstances: Reports Involve Minimal Duplication, but Some Data Are Not Being Well- Managed: Large Number of Participant Disclosures Do Not Always Communicate Effectively: Conclusions: Matter for Congressional Consideration: Recommendations for Executive Action: Agency Comments and Our Evaluation: Appendix I: Methodology for Analyzing the Readability of Participant Disclosures: Appendix II: Required Pension Plan Reports and Disclosures: Appendix III: Disclosures with Readability Provisions under ERISA or IRC: Appendix IV: Comments from the Department of Labor: Appendix V: Comments from the Department of Treasury/Internal Revenue Service: Appendix VI: Comments from the Pension Benefits Guaranty Corporation: Appendix VII: Comments from the Social Security Administration: Appendix VIII: GAO Contact and Staff Acknowledgments: Related GAO Products: Tables: Table 1: Variation in Required Routine Reports and Disclosures by Type, Size, and Design of Plan: Table 2: Comments on Disclosures Identified as Difficult to Understand: Table 3: Grade-Level Reading Scores for Model Notices: Table 5: Plan Sponsors' Routine Reports to Agencies: Table 6: Plan Sponsors' Routine Disclosures to Participants, Beneficiaries, and Alternate Payees: Table 7: Plan Sponsors' Nonroutine Reports to Agencies: Table 8: Plan Sponsors' Nonroutine Disclosures to Participants, Beneficiaries, and Alternate Payees: Figures: Figure 1: Number of Plans and Participants in Plans with Specific Characteristics, 2011: Figure 2: Number of Routine and Nonroutine Reports and Disclosures by Lead Oversight Agency: Figure 3: Fragmented Management of Data on Deferred Pension Benefits: Abbreviations: DB: defined benefit: DC: defined contribution: EAC: ERISA Advisory Council: EACA: eligible automatic contribution arrangement: ERISA: Employee Retirement Income Security Act of 1974: FKGL: Flesch-Kincaid Grade-Level: FTAP: funding target attainment percentage: IRA: individual retirement account: IRC: Internal Revenue Code: IRS: Internal Revenue Service: OMB: Office of Management and Budget: PBGC: Pension Benefit Guaranty Corporation: PPA: Pension Protection Act of 2006: QACA: qualified automatic contribution arrangements: QDIA: qualified default investment alternatives: SEC: Securities and Exchange Commission: SPD: summary plan description: SSA: Social Security Administration: [End of section] GAO: United States Government Accountability Office: 441 G St. N.W. Washington, DC 20548: November 21, 2013: Congressional Requesters: The private sector pension system in the United States represents trillions of dollars in assets and is a key source of financial security for nearly 130 million Americans. The framework of reports and disclosures is intended to ensure that plans are operated in accordance with certain prescribed standards and that sufficient information is provided to protect participant rights and help participants make informed retirement planning decisions. Congress has attempted to promote transparency and enhance retirement security by incorporating reporting and disclosure requirements into legislation. The Employee Retirement Income Security Act of 1974 (ERISA),[Footnote 1] requires private sector pension plan sponsors, fiduciaries, administrators, or other third parties[Footnote 2] to report certain information to federal agencies, including the Department of Labor (Labor), the Pension Benefit Guaranty Corporation (PBGC), and the Department of the Treasury's (Treasury) Internal Revenue Service (IRS). ERISA also requires plan sponsors to provide information, generally referred to as disclosures, to plan participants.[Footnote 3] Recognizing that the system of pension plan reports and disclosures has become more complex over time, you requested that we look at how useful all the pension reporting and disclosure requirements are to sponsors, participants, and government officials and determine whether there are ways to improve the system. This report 1) describes the reports and disclosures that sponsors of private sector pension plans may be required to provide to government agencies and plan participants; 2) identifies the ways, if any, that required reports to agencies may be inefficient or ineffective; and 3) identifies the ways, if any, that required disclosures to participants may be inefficient or ineffective. To determine what reports and disclosures pension plan sponsors are required to provide to federal agencies and plan participants, respectively, we compiled available lists and other information about reports and disclosures from agency websites and lists from three service provider websites. The assembled information included details about who must submit information; to whom it must be provided; citations to federal laws, regulations, guidance, forms, and model notices;[Footnote 4] and events and circumstances that trigger reports and disclosures. We then worked with officials at the agencies--Labor, IRS, and PBGC--to revise and update the list and add details about agency reports and participant disclosures. We also reviewed relevant federal laws and regulations to verify selected information. To identify the ways reports and disclosures may be inefficient or ineffective, we interviewed representatives from nine associations, two plan sponsors, six service providers, and four participant advocacy groups, and reviewed data on 1 year of participant calls to Labor's call center for benefit assistance.[Footnote 5] The interview information cannot be generalized beyond the individuals we interviewed, but we selected the groups to represent a wide range of differing perspectives on any issues with and ways to improve the preparation and use of the information provided. We also interviewed officials at PBGC, IRS, and Labor to obtain their perspective on the efficiency and effectiveness of the reporting and disclosure process. In addition, we evaluated selected reports to agencies for redundancy, and we evaluated the readability of certain model notices produced by Labor and IRS to help plan sponsors prepare required disclosures. (For a more detailed description of our readability analysis, see appendix I.) We conducted this performance audit from July 2012 through October 2013 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Background: ERISA is the primary federal law governing private sector pension plans, and includes requirements for plan sponsors to provide reports to agencies and disclosures to participants. Labor, PBGC, and IRS jointly interpret and clarify the provisions of ERISA that fall under their respective purviews through regulation and other guidance to help pension plan sponsors meet their responsibilities under the law. Since ERISA was enacted in 1974, over 175,000 defined benefit (DB) plans have terminated, and defined contribution (DC) plans have replaced DB plans as the predominant type of pension plan. ERISA and related Internal Revenue Code (IRC) provisions have frequently been amended to reflect these and other developments. For example, the Pension Protection Act of 2006 (PPA) revised minimum plan funding standards, enhanced protections for spouses, strengthened plan asset diversification requirements, and included various provisions to improve the portability of pension plans, among other things.[Footnote 6] These statutory changes have been accompanied by increases in the breadth and complexity of pension plan sponsors' reporting and disclosure requirements. DB plans generally maintain a fund to provide a fixed level of monthly retirement income based on a formula specified in the plan. The employer is usually responsible for funding the plan, bears all the investment risk, and may be responsible for investing and managing its assets. In contrast, a DC plan does not promise a specific amount of benefits at retirement, but instead the benefit is based on the investment returns on employee and employer contributions to the employee's individual account. DC plan participants bear the full risk of investment and realize the gains and losses on those investments. DB and DC plans may be single-employer plans or they may be multiemployer plans, which are established through collective bargaining agreements including two or more employers and operated under the joint trusteeship of labor and management.[Footnote 7] Pension plans range considerably in terms of size: from one participant to several hundred thousand. The prevalence of plans in terms of type and size is illustrated in figure 1. Most plans are small (defined as fewer than 100 participants), thus small plans account for most report filings. However, since small plans have fewer participants, they are required to provide fewer disclosures.[Footnote 8] Also, many more plans are single-employer than multiemployer, and they also represent many more participants, so the single-employer reporting and disclosure requirements apply to far more plans than the multiemployer reporting requirements. Reporting and disclosure tasks are frequently outsourced, in full or in part, to service providers such as accountants, actuaries, investment advisors and record keepers. Figure 1: Number of Plans and Participants in Plans with Specific Characteristics, 2011: [Refer to PDF for image: stacked horizontal bar graph] Plan: All plans; Number of plans: Defined benefit: 45,300 (7%); Defined contribution: 638,400 (93%). Plan: Small plans (less than 100 participants); Number of plans: Defined benefit: 35,400 (6%); Defined contribution: 563,100 (94%). Plan: Large plans (more than or equal to 100 participants); Number of plans: Defined benefit: 9,800 (12%); Defined contribution: 75,300 (88%). Plan: Single-employer; Number of plans: Defined benefit: 43,800 (6%); Defined contribution: 637,100 (94%). Plan: Multiemployer; Number of plans: Defined benefit: 1,400 (53%); Defined contribution: 1,300 (47%). Participants: All plans; Number of participants[A]: Defined benefit: 40.9 million (32%); Defined contribution: 88.7 million (68%). Participants: Small plans (less than 100 participants); Number of participants[A]: Defined benefit: 400,000 (4%); Defined contribution: 11.4 million (96%). Participants: Large plans (more than or equal to 100 participants); Number of participants[A]: Defined benefit: 40.4 million (34%); Defined contribution: 77.4 million (66%). Participants: Single-employer; Number of participants[A]: Defined benefit: 30.5 million (27%); Defined contribution: 84.3 million (73%). Participants: Multiemployer; Number of participants[A]: Defined benefit: 10.4 million (70%); Defined contribution: 4.4 million (30%). Source: GAO analysis of Labor’s Abstract of 2011 Form 5500 Annual Reports, June 2013. [A] Participant numbers do not add up to all plan figures because participants can be enrolled in more than one plan. [End of figure] Labor, IRS, and PBGC each oversees a different aspect of private sector pension plans, with Labor taking primary responsibility for reporting and disclosure requirements. Labor promulgates regulations and produces other guidance related to reporting and disclosure. Within Labor, the mission of the Employee Benefits Security Administration includes ensuring work-related benefits and rights. Labor enforces requirements intended to ensure that pension plans operate in the best interest of participants and beneficiaries. [Footnote 9] IRS determines whether private sector pension plans qualify for preferential tax treatment under the IRC. Participants in tax- qualified pension plans can defer taxes on contributions and investment earnings until they receive benefits in retirement. In addition, contributions paid by an employer to or under a qualified pension plan are generally tax deductible as a business expense. [Footnote 10] The IRC requires plan sponsors to submit certain reports in order to verify that plans meet certain of the criteria for tax- qualified status and to make certain disclosures to participants about retirement planning decisions for tax purposes. Title II of ERISA amended the IRC and included standards that plans must meet to qualify for preferential tax treatment. PBGC insures the benefits of most private sector DB plan participants up to certain statutory limits in covered single-employer plans. When such plans terminate with insufficient assets to pay all benefits--as can happen in the bankruptcy of plan sponsors with underfunded plans-- PBGC pays participants their benefits up to certain statutory limits. PBGC also provides assistance to multiemployer plans when such plans become insolvent. Accordingly, ERISA requires DB plan sponsors to pay premiums to insure plan benefits and provide information about the financial health of the plan. The information allows PBGC to focus resources on plans at risk of termination. PBGC reporting and disclosure is only required of DB plans that are insured by PBGC. [Footnote 11] PBGC does not insure the benefits of participants in DC plans. Three other federal agencies also have roles in pension reporting and disclosure requirements: the Social Security Administration (SSA), the Securities and Exchange Commission (SEC), and the Office of Management and Budget (OMB). SSA uses limited information about plan-vested beneficiaries to prepare notices to retirees about private sector pension benefits for which they may be eligible. SEC requires publicly- traded companies that permit employees to invest in employer stock in a voluntary contributory plan to file annual reports just as any such company offering stock, unless an exemption applies.[Footnote 12] OMB, within the Executive Office the President, approves agency requests for information from the public, which includes private employers sponsoring retirement plans. OMB reviews the implementation of reporting requirements under the Paperwork Reduction Act of 1995,[Footnote 13] to ensure that they involve only necessary information and do not impose an inordinate burden on those reporting. Required Reports and Disclosures Vary by Plan Type, Size, and Circumstances: To comply with the reporting and disclosure requirements specified under federal statute and regulation, Labor, IRS, and PBGC oversee more than 70 different reports and 60 different disclosures to participants that pension plan sponsors may have to provide, depending on their plans' type, size, and circumstances.[Footnote 14] Some reports and disclosures are required to be provided on a routine basis, such as annually or quarterly, but most are nonroutine--that is, they are required to be provided on a one-time basis when some type of triggering event occurs. (See appendix II for detailed lists of the reports and disclosures we identified.) Various reports and disclosures have been added over time through changes in statute and regulation, as a result of the development of new plan designs and in response to issues affecting participant security. For example, in 2002, following the scandal involving the Enron Corporation, a new disclosure requirement concerning periods when account activity is temporarily limited or restricted--referred to as blackout periods-- was enacted by the Sarbanes-Oxley Act of 2002 to help protect pension participants in such situations.[Footnote 15] In 2006, PPA also created several new disclosure requirements.[Footnote 16] Other requirements, such as those related to the disclosure of fee and expense information by certain plans, were recently promulgated by regulation under ERISA.[Footnote 17] A breakdown of the number of reports and disclosures under the purview of each federal agency is illustrated in figure 2. The system of reports and disclosures is complex, and determining which requirements may apply to any given plan can be challenging. Yet agency resources to help plan sponsors navigate this complex system are neither comprehensive nor up-to-date. Figure 2: Number of Routine and Nonroutine Reports and Disclosures by Lead Oversight Agency: [Refer to PDF for image: stacked horizontal bar graph] Number of reports and disclosures: Routine reports: Labor: 0; IRS: 2; Pension Benefit Guaranty Corporation (PBGC): 2; Jointly managed[A]: 12; Total: 16. Routine disclosures: Labor: 8; IRS: 3; Pension Benefit Guaranty Corporation (PBGC): 1; Jointly managed[A]: 0; Total: 12. Nonroutine reports: Labor: 2; IRS: 18; Pension Benefit Guaranty Corporation (PBGC): 36; Jointly managed[A]: 0; Total: 56. Nonroutine disclosures: Labor: 13; IRS: 26; Pension Benefit Guaranty Corporation (PBGC): 0; Jointly managed[A]: 12; Total: 51. Source: GAO analysis of information provided by Labor, IRS, and PBGC, and related laws and regulations. [A] The Form 5500 report and its schedules are jointly overseen by all three agencies. [End of figure] Routinely Required Reports and Disclosures Are Determined by Various Plan Characteristics: Virtually all plans are required to submit certain annual reports to the federal government and to send certain periodic disclosures to plan participants. For example, each year, most plan sponsors must submit a version of the Form 5500--the Form 5500 report, the 5500 short form (5500-SF), or the 5500 EZ--for each DB or DC plan they sponsor.[Footnote 18] In plan year 2011, plan sponsors submitted more than 900,000 Form 5500, 5500-SF, and 5500 EZ reports combined. Most large plans with 100 or more participants file the Form 5500, while small plans covering fewer than 100 participants that are also invested in secure and easy to value assets may file the 5500-SF, and one-participant pension benefit plans and certain partnership and foreign plans may file the 5500-EZ. The forms call for varying levels of detailed information about participants, plan characteristics, and plan funding. Labor, IRS, and PBGC share the information reported in the Form 5500 and its attachments to help ensure that employee benefit plans are operated and managed in accordance with certain prescribed standards, and that participants, beneficiaries, and federal regulators have sufficient information to protect the rights and benefits of participants and beneficiaries under employee benefit plans. All large plans and many small plans must report their financial information on an attachment to their Form 5500: large plans must submit a schedule H and smaller plans may be required to submit a schedule I. Most small plans are eligible to file the Form 5500-SF, which contains a limited number of financial information fields in lieu of the schedule I.[Footnote 19] Questions on the Form 5500, 5500- SF, and schedules H and I require sponsors to provide information on plan termination and transfers to other plans. In addition, all plans with benefits provided by an insurance company must also attach schedule A.[Footnote 20] Some large plans have additional annual reporting requirements; those with loans or fixed income obligations in default or classified as uncollectible are required to attach schedule G.[Footnote 21] In addition, with limited exceptions, plan sponsors must provide participants in each DB and DC plan they sponsor three routine disclosures: the summary plan description (SPD), summary annual report or annual funding notice, and periodic pension benefit statement. [Footnote 22] The SPD is the primary vehicle for informing participants and beneficiaries about their plan and how it operates, detailing information on when an employee can begin to participate in the plan, when benefits become vested, what the benefits are, and how to file a claim for benefits. The SPD must be provided to participants at least once every 10 years, or more often if there are changes, along with interim notices of any material changes in a "summary of material modification."[Footnote 23] All plans, with limited exceptions, must provide to participants either the summary annual report or the annual funding notice, depending on their plan type. The summary annual report, required for DC plans, and DB plans in some instances, summarizes information from the Form 5500 and its attachments and includes a basic financial statement, minimum funding standards for plans, and participants' rights to other specific information. Most DB plans must file the annual funding notice, which provides participants with basic information about the plan's funding status and financial condition.[Footnote 24] Pension benefit statements with information on benefits that have been accrued must also be provided periodically to all participants.[Footnote 25] The specific contents and frequency of the benefit statements vary depending on the type of plan: individual account plans that permit participants and beneficiaries to direct the investment of assets in their account must provide a pension benefit statement at least once each calendar quarter, plans that do not provide participants or beneficiaries a right to direct their investments must provide the disclosure at least once each calendar year, and DB plans must provide it at least once every 3 years. DB plans, which represent about 7 percent of all plans, are subject to additional reporting and disclosure requirements. For example, only DB plans must submit comprehensive premium filings to PBGC, with information requirements that vary according to plan size and funding level.[Footnote 26] In addition, with limited exceptions, only DB plans must report their actuarial information on certain schedules attached to their Form 5500s.[Footnote 27] DB plans have additional unique disclosure requirements. Certain DB plans must provide information through two additional annual disclosures: multiemployer plans must provide multiemployer pension plan summary plan information[Footnote 28] and single-employer plans with more than one contributing sponsor not under common control must provide a notification to substantial employers.[Footnote 29] Because DC plans are based on individual accounts, they are responsible for disclosures related to that characteristic. For example, only DC plans must inform participants of their right to make or change elective deferrals [Footnote 30] and make an annual fee disclosure to their participants. [Footnote 31] DC plan sponsors may also make decisions in their plan design that create additional routine disclosure requirements. For example, to encourage participation, employers may enroll new employees automatically into their 401(k) plan.[Footnote 32] The automatic enrollment plan design typically includes a default employee contribution rate and default investment arrangements, in which participants who have not specified their contributions or investments are assigned to a determined contribution level and selected investments.[Footnote 33] Plan sponsors must inform participants of the automatic enrollment and defaults annually through two disclosures--the notice for fiduciary relief for investments in qualified default investment alternatives (QDIA)[Footnote 34] and either the eligible automatic contribution arrangement (EACA) notice[Footnote 35] or the qualified automatic contribution arrangements (QACA) notice.[Footnote 36] The disclosures inform participants of the arrangements and their rights and options and participants may use the information to elect to change their contributions and investments or opt out of the arrangements. In addition, DC plans providing investment advice to participants through asset managers, such as a fiduciary advisor, must provide the notice of availability of investment advice to participants.[Footnote 37] To illustrate the variation in requirements, Table 1 describes the routine reports and disclosures required of DB and DC plans based on certain characteristics. Additional routine reports and disclosures may be required depending on a plan's specific design and circumstances. However, across the characteristics illustrated, the number of routine reports and disclosures that may be required ranges from seven to nine. For example, a small single-employer DB plan would be required to provide a total of seven routine reports and disclosures, while a large multiemployer DB plan would be required to provide a total of nine. Any DC plan would be required to provide a total of seven routine reports and disclosures, while those adopting an automatic enrollment design would be required to provide a total of nine. Table 1: Variation in Required Routine Reports and Disclosures by Type, Size, and Design of Plan: Defined benefit (DB) plans: Reports required of all DB plans; Name of report or disclosure: * Form 5500 OR 5500 short form OR 5500 EZ[A]; * Comprehensive premium filings to PBGC flat and variable rate. Additional reports based on type of DB plan: * If single-employer; Name of report or disclosure: * 5500 schedule SB. * If multiemployer; Name of report or disclosure: * 5500 schedule MB[B]; * Zone status certification. Additional reports based on size of DB plan: If large (100 or more participants); Name of report or disclosure: 5500 schedule H (financial information); If large (500 or more participants); Name of report or disclosure: Premium filings to PBGC estimated flat rate filing. If small (fewer than 100 participants); Name of report or disclosure: 5500 schedule I (financial information)[C]. Disclosures required of all DB plans; Name of report or disclosure: * Periodic pension benefit statement; * Annual funding notice (or, in some cases, summary annual report); * Summary plan description[D]. Defined contribution (DC) plans: Reports required of all DC plans; Name of report or disclosure: * Form 5500 OR 5500 short form OR 5500 EZ[A]. Additional reports based on size of DC plan: If large (100 or more participants); Name of report or disclosure: 5500 schedule H. If small (fewer than 100 participants); Name of report or disclosure: 5500 schedule I[C]. Disclosures required of all DC plans; Name of report or disclosure: * Periodic pension benefit statement; * Summary annual report; * Summary plan description[D]; * Effective opportunity to make or change elective deferrals; * Participant fee disclosure 404(a). Additional disclosures based on certain DC plan designs: If automatic enrollment (with default contribution and default investment arrangements); Name of report or disclosure: * Eligible automatic contribution arrangement notice (EACA) or Qualified automatic contribution arrangement notice (QACA); * Notice for fiduciary relief for investments in qualified default investment alternatives. Source: GAO analysis of information provided by Labor, IRS, and PBGC, and related laws and regulations. Note: For this table, schedules of the 5500 are counted as separate reports. Additional routine reports and disclosures may be required if the plan meets additional criteria or under specific circumstances. See appendix II for additional details on routine and nonroutine reports and disclosures. [A] A version of the Form 5500--the Form 5500 report, the 5500 short form (5500-SF), or the 5500 EZ--is required of most plans. [B] Form 5500 schedule MB is required of certain defined contribution money purchase plans in addition to all multiemployer DB plans. [C] Schedule I is not required of plans that file Form 5500 short form. [D] The summary plan description is not required of certain types of plans (such as "top hat" plans and simplified employee pension plans) that meet the conditions for alternate method of compliance. [End of table] Nonroutine Reports and Disclosures Are Triggered by Certain Events: Beyond routine reporting and disclosure requirements, federal statutes and related regulations have also given rise to more than 100 different nonroutine reports and disclosures that may be required to be provided on a one-time basis when a specific triggering event or condition affects the plan or participant. In some cases, the conditions triggering a report or disclosure are fairly common, while other conditions are very rare. For example, one relatively common event is when a participant in a plan separates from employment with deferred vested benefits. In such cases, plan sponsors are required to file an annual registration statement identifying participants with deferred vested benefits (8955-SSA) with IRS and provide a disclosure to the separating participants about their benefits.[Footnote 38] Another event that occurs fairly frequently is when a plan sponsor seeks a determination on the tax-qualified status of its plan from IRS. We identified six individual reports and one disclosure associated with such tax determination requests. IRS data indicate that plan sponsors submit at least 17,000 filings of these reports annually. However, conditions that trigger most of the nonroutine reports and disclosures are relatively rare. Of the 40 nonroutine reports for which agencies provided data, only 5 had more than 5,000 filings in the most recent data year available.[Footnote 39] Many (20) of the nonroutine reports for which data were reported had fewer than 100 filings. Several of the nonroutine reports with fewer than 100 reported filings are required of single-employer DB plans when an event occurs that might put plan benefits at risk, such as underfunding of the plan, bankruptcy, or distress termination. For example, each contributing sponsor of a single-employer DB plan, or a member of a contributing sponsor's controlled group, is required to submit an annual report of financial and actuarial information to PBGC (also known as the 4010) if the plan is less than 80 percent funded, could be subject to a lien, or still owe a portion of previously missed required contributions exceeding $1 million.[Footnote 40] In fiscal year 2011, DB plan sponsors submitted 340 such reports. [Footnote 41] In addition, 7 of the nonroutine reports may be required if the sponsor of a single-employer DB plan makes various changes, such as a change in plan ownership; none had more than 40 filings in fiscal year 2012. Agencies Do Not Provide Clear and Comprehensive Information to Facilitate Compliance: Labor's mission includes efforts to ensure the security of Americans' retirement benefits by assisting and educating workers, plans sponsors, fiduciaries, and service providers, and by vigorously enforcing the law.[Footnote 42] The need for such efforts is clear, especially with respect to helping plan sponsors navigate a complex system of more than 70 different reports and 60 different disclosures, and identify which they may be required to submit. Yet, the online resources provided by Labor and the other ERISA agencies to support plan sponsors in this process are not clear, comprehensive, or up-to- date. As discussed above, a plan's type, size, and circumstances determine which routine reports and disclosures are required. Also, although many nonroutine reports and disclosures are limited to specific types of plans and are fairly rare, sponsors may find it challenging to recognize when their actions or circumstances have triggered the need for a report or disclosure. In addition, in some cases, reports and disclosures are subject to special requirements regarding to whom the information must be provided. For example, the annual funding notice-- a routine report for all DB plans under Labor's purview--is required to be sent to PBGC, as well as to each plan participant and beneficiary, each labor organization representing such participants or beneficiaries and, in the case of multiemployer plans, to each employer that has an obligation to contribute to the plan.[Footnote 43] Another example is the notification of resource benefit level--a nonroutine report triggered by insolvency in a multiemployer DB plan that does not terminate.[Footnote 44] This report is required to be sent to PBGC, with copies to IRS, employers, employee organizations, participants, and beneficiaries. Adding to the complexity for many plan sponsors is the fact that they may sponsor more than one plan, so the burden of reporting is magnified. A plan sponsor may offer multiple plans of differing types and designs to employees. Alternatively, a sponsor may have stopped offering one type of plan and begun offering another--as with the shift from a DB to a DC plan, a growing trend over the past 3 decades--and as a result, may not be as familiar with the requirements applicable to the new plan type. In addition, even if a sponsor freezes a plan--that is, stops new employees from joining the plan, or stops previous employees from continuing to accrue benefits under the plan--certain reports and disclosures continue to be required until the plan terminates. [Footnote 45] In our efforts to identify required reports and disclosures, we found that each ERISA agency provides some online resources regarding these requirements. However, the resources provided are neither comprehensive nor up-to-date. They do not individually or as a whole provide sufficiently detailed, complete, up-to-date, and searchable information to allow plan sponsors to easily identify the reports and disclosures they must submit to be in compliance. Labor's website provides the best information available from agencies through a guide listing many required reports and disclosures;[Footnote 46] however, as we worked with the agencies to refine the list of reports and disclosures we had identified, we found that the guide was neither comprehensive nor fully accurate. To start, the guide is incomplete: it does not include many of the IRS reports and disclosures or several reports and disclosures under Labor's and PBGC's purview. Also, because the guide has not been updated since October 2008, it does not include recent reporting and disclosure requirements, such as the participant fee disclosure requirement, implemented in 2012. In addition, although the guide provides some information about the plan type that must report, to whom reports and disclosures must be provided, and citations to applicable federal laws, as well as available forms and model language and formats for some disclosures (referred to as "model notices"), this information is not systematic or comprehensive. Labor's guide does not always provide legal citations and, when provided, it does not list them consistently in the same place in the descriptions of each report and disclosure. Moreover, Labor's guide does not list all available model notices that might aid plan sponsors in compliance. For example, the guide does not indicate that there is a model for the annual funding notice or the notices of intent to terminate for standard and distress terminations. PBGC's and IRS's websites also provide information on pension plan sponsors' reporting and disclosure requirements, including links to Labor's guide, but neither provides comprehensive information. For example, PBGC's website page on reporting and disclosure features certain selected requirements for DB plans, such as the annual funding notice, the annual report of financial and actuarial information (also known as the 4010), and other reportable events.[Footnote 47] Other links to reports and disclosures are available on PBGC's website but they are not in a central location or easily searchable, which may make it difficult for plan sponsors to reliably determine if they have met all requirements. Similarly, IRS provides descriptions of certain selected reports and disclosures at several locations across its website. For example, the IRS site provides a page targeted to plan sponsors with brief descriptions of various reports that may be required,[Footnote 48] and another page targeted to employees with brief descriptions of various disclosures that may be required.[Footnote 49] However, these descriptions do not include information about the types of plans responsible for providing the reports and disclosures and the lists are not comprehensive. Reports Involve Minimal Duplication, but Some Data Are Not Being Well- Managed: Minimal Duplication Reflects Agency Efforts to Eliminate Unnecessary Reporting: Our review of plan sponsor reports to agencies revealed only minimal redundancy, which was consistent with what we heard from associations we interviewed. We reviewed the content of routine reports that DC plans are required to submit annually or more frequently and found duplication only in plan identifying information and contact information for plan sponsors and administrators. The general absence of duplication in reports to agencies may be due, in part, to the large portion of routine agency reporting subsumed by the Form 5500 annual report and its schedules, which are administered jointly by Labor, IRS and PBGC. By working together to develop the Form 5500 and its schedules, the three agencies can share the content and employee benefit plans can satisfy various annual reporting requirements under Title I and Title IV of ERISA and under the IRC. In addition, agency officials noted that representatives from all three agencies continue to meet regularly to look for opportunities to clarify and simplify the 5500 and its schedules. Other efforts to eliminate unnecessary reporting by plan sponsors include actions taken under Executive Order 13,563, which calls on agencies to reduce their regulatory burden.[Footnote 50] Both Labor and PBGC are considering actions that would reduce plan sponsor reporting requirements as a result of the order. For example, Labor is considering permitting certain individual account plans whose sponsors are in bankruptcy to file a summary terminal report instead of an annual Form 5500 report, which would allow plans to avoid costly annual audit fees that otherwise would diminish plan assets.[Footnote 51] PBGC has also proposed new waivers that would allow some plans, identified as lower risk, to be exempt from certain reporting. [Footnote 52] IRS officials described several initiatives under way in response to the executive order, but noted that none of these efforts are specifically focused on simplifying regulations related to pension reports and disclosures. All three agencies are also subject to the Paperwork Reduction Act, which requires that they manage information resources to reduce information collection burdens and obtain approval from OMB for their information collection requests.[Footnote 53] In general, plan sponsor representatives told us that they find the extent of duplication across reports to agencies to be minimal and not onerous. However, two associations and a service provider noted inconsistency between information reported on fees by service providers to sponsors[Footnote 54] and information sponsors are required to report on the Form 5500 schedule C.[Footnote 55] According to one industry representative, inconsistent definitions across the two reports result in vast differences in the content, making the service provider report less useful to plan sponsors as they prepare schedule C. Specifically, while both reports require information on service providers and indirect compensation, these terms are defined differently in the two reports. Labor officials explained that the service provider disclosure is prospective, to provide plan sponsors with fee information from service providers before entering into a contract. schedule C is retrospective, and provides information on the actual fees paid. Labor officials said the agency has received requests to change schedule C to better harmonize these requirements and is considering doing so. Poorly Managed Data for One Report Results in Misleading Notices to Retirees: In our review of Labor's call center data,[Footnote 56] we found that many participants were calling with questions about the potential private sector pension benefit information notice received from SSA,[Footnote 57] which provides information about private pension benefits retirees may be owed by a past employer. The notices from SSA are based on data that plan sponsors are required to report to IRS, and we found that poor management of the data, spread across three agencies, results in misleading information included in notices provided to some retirees. Sponsors of plans that had participants separate from employment with deferred vested benefits are required to submit an annual report to the IRS: the registration statement identifying separated participants with deferred vested benefits, also known as the 8955-SSA.[Footnote 58] IRS passes the information from the 8955-SSA to SSA. SSA then uses the data to inform retirees of the private pension benefits they may be entitled to when they apply for Social Security.[Footnote 59] The notice is intended to reflect all the deferred vested pension plan benefits claimants have earned from all previous employment in the private sector over the course of their careers, minus any distributions received. However, the vested benefits data are not managed in a way that ensures their accuracy. If retirees have questions about the benefits or need assistance, the notice instructs them to contact their plan administrator, previous employer, or Labor. A plan sponsor and an association we spoke with said such inquiries require investigations into plan records only to find, in some cases, that the benefits have already been distributed.[Footnote 60] According to industry representatives, inquiries regarding inaccurate notices of potential benefits that had actually already been paid can be burdensome and costly. Representatives of one plan sponsor said that they recently received an inquiry based on an SSA notice that took 16 hours to research because the record was from 1978. The plan sponsor representatives said the plan gets so many inquiries from retirees that it employs a full-time staff person at $60,000 per year to research potential benefits, and that the inquiries mean that the plan must retain participant benefit records in perpetuity. Officials from an association said that inquiries regarding potential benefits can create an administrative headache, even when no benefit is owed. They added that misreporting happens "a lot." We explored the reasons behind erroneous reports of potential benefits to retirees and found that decentralized administration, lack of data validation, unclear guidance, and paper reporting all create challenges to managing the data. Responsibility for the information is fragmented across three agencies: IRS, SSA, and Labor (see figure 3). The IRC requires plan sponsors to file the 8955-SSA reports with the IRS, but according to IRS officials, IRS does not use the data. As the statute requires, IRS passes the data along to SSA. SSA houses the data; eventually extracting individual records to send notices to retirees when they apply for Social Security. Finally, Labor is designated on the notice as the agency to contact for assistance, even though Labor is not involved in either the collection or maintenance of the data.[Footnote 61] SSA officials noted that some participants need help from Labor to locate past employers when the employer contact information on the notice is outdated, which can often be the case due to mergers and acquisitions.[Footnote 62] However, according to agency officials, none of these agencies ensures that the data are updated and accurate over time. IRS simply collects and passes the data on to SSA. Rather than validate the accuracy of the data, SSA characterizes the information contained in its notices as describing potential pension plan benefits. Our review of Labor's call center data indicated that when participants called Labor about a potential benefit notice, benefits advisors often told participants the information was not reliable because the data are not regularly updated or verified and, in some cases, may be inaccurate.[Footnote 63] Figure 3: Fragmented Management of Data on Deferred Pension Benefits: [Refer to PDF for image: illustration] Prior to retirement: Participant separates from employment leaving vested benefits in plan ‘A’; Plan sponsor ‘A’ notifies IRS with form 8955-SSA; IRS sends data to Social Security Administration (SSA); SSA stores records of participant’s vested benefits. Change jobs: Participant separates from employment leaving vested benefits in plan ‘B’; Plan sponsor ‘B’ notifies IRS with form 8955-SSA; IRS sends data to SSA; SSA stores records of participant’s vested benefits. After retirement: Participant retires and submits claim for Social Security to SSA; SSA compiles data on participant’s vested pension benefits and sends notice(s) to participant. Participant has questions about a vested pension benefits notice from SSA; Department of Labor helps participant contact plan sponsor and verifies benefits; Plan sponsor verifies benefits. Source: GAO analysis of federal law, interviews with federal officials, and data on participant calls to benefits advisors at Labor. [A] The plan sponsor is also required to provide participants with an individual statement, as required under 26 U.S.C. § 6057(e), at the time that form 8955-SSA notice is filed with IRS. [End of figure] Unclear guidance is another factor that may be contributing to inaccurate data. We found the 8955-SSA instructions confusing, with seemingly conflicting guidance about whether participants with benefit payouts should be reported. One section of the 2012 instructions directs plan sponsors to identify distributions of benefits to previously-reported participants. Specifically, plan sponsors are directed to use a code to identify participants who were previously reported but are no longer entitled to deferred vested benefits, including participants receiving lump-sum payouts or participants transferred to another plan. However, the form's instructions also contain a section titled "When Not to Report a Participant" which instructs plan sponsors not to report participants who have been paid some or all of their deferred vested benefit. According to IRS officials, this part of the notice relates to when to report a participant for the first time; however, this may not be clear to some plan sponsors. In addition, in a meeting with employee benefits tax experts from eight different organizations, representatives of one association of certified public accountants told us that reporting distributions had not always been required. Although SSA would need such information to accurately update the data on benefits still owed over time, SSA officials said the IRS is the agency responsible for establishing the reporting requirements. [Side bar: Excerpt of Potentially Confusing 2012 8955-SSA Instructions: "When Not To Report a Participant; A participant is not required to be reported on Form 8955-SSA if, before the date of the Form 8955-SSA is required to be filed (including any extension of time for filing), the participant: ; Is paid some or all of the deferred vested retirement benefit (See Caution below); Returns to service covered by the plan and/or accrues additional retirement benefits under the plan, or; Forfeits all the deferred vested retirement benefit. If payment of the deferred vested retirement benefit ceases before ALL of the participant's benefit is paid to the participant or beneficiary, information on the participant's remaining benefit shall be filed on the Form 8955-SSA filed for the plan year following the last plan year within which the payment ceased." Source: 2011 Form 8955-SSA instructions. [End of side bar] In addition, plan sponsors are not required to submit the 8955-SSA electronically. Most submit it on paper, and some are handwritten, which may also contribute to inaccurate data. In 2012, SSA officials only received about 20 percent of the 8955-SSA submissions electronically from IRS. SSA officials estimated they will spend $668,000 in fiscal year 2013 processing the paper workload associated with the 8955-SSA, which includes paying a contractor to scan the documents into an electronic format. Data that cannot be scanned successfully are keyed in manually. Although electronic submissions could be less prone to data entry errors, as well as less costly to process, currently IRS is prohibited by statute from requiring that all sponsors submit information electronically, with limited exceptions.[Footnote 64] The importance of tracking an individual's pension benefits has grown as workers continue to have multiple jobs over the course of their careers. Each time an employee separates from employment, vested benefits may be left in the former employer's plan. As a result, over time, an individual may have accrued benefits that are left in several different plans.[Footnote 65] The 8955-SSA is currently the only mechanism we identified for tracking a participant's retirement benefits earned over time and left in plans of various employers. Despite the need for reliable benefit tracking, as long as management of the data remains fragmented, improvement in the accuracy of the data is unlikely. Beyond issuing the form and instructions, IRS views its role as merely to serve as a pass-through of the data from plan sponsors to SSA, SSA views its role as merely to provide retirees with whatever data they receive from IRS, and Labor views its role as merely to respond to inquiries. None voiced a willingness to assume responsibility for ensuring the accuracy of the data. As the agency that individuals contact when they are ready to retire, SSA may be the agency best situated to provide the notices to retirees about previously-earned private pension benefits. However, as the agency with primary responsibility for administering and enforcing private pension plans' reporting requirements under ERISA, we believe Labor may be best situated to provide consistent guidance and instruction, collect and maintain accurate data electronically, and respond to retiree inquiries on their benefits. Labor already administers a program to help participants track down their pension benefits. Under Labor's Abandoned Plan Program, the Employee Benefits Security Administration helps participants obtain their benefits when their plan lacks a responsible sponsor or administrator. In addition to Labor's program, PBGC maintains a database of missing participants with benefits in plans that have been terminated, and is in the process of expanding this program to include DC plans.[Footnote 66] Large Number of Participant Disclosures Do Not Always Communicate Effectively: The quantity of information that plan sponsors are required to disclose may be overwhelming and confusing to participants. We found that the content, presentation, and the grade-level at which disclosures are written may also present barriers to communication. [Footnote 67] Concerns about the readability of participant disclosures are not new. In 2005 and again in 2009, the ERISA Advisory Council (EAC)[Footnote 68] held hearings on the difficulties pension disclosures impose on both plan sponsors and participants.[Footnote 69] Following the hearings in 2009, the EAC recommended improvements to individual participant disclosures and the system as a whole, including a recommendation that Labor review all pension plan disclosures required under Title I of ERISA to identify opportunities for streamlining. Although Labor agreed that disclosures would benefit from a comprehensive review, officials told us they had not yet implemented that recommendation. Quantity of Information May Overwhelm Participants: Number of disclosures is increasing: The breadth and complexity of pension plan sponsors' disclosure requirements have increased significantly since ERISA was enacted in 1974. As described earlier, our review identified more than 60 different disclosures to participants that pension plan sponsors may be required to provide, depending on their plans' type, size, and circumstances. Within ERISA's overall reporting and disclosure framework, disclosures are intended to ensure that employee benefit plans are operated and managed in accordance with certain prescribed standards and that participants, beneficiaries, and regulators, have sufficient information to protect the rights and benefits of participants and beneficiaries under employee benefit plans. Thus, while some disclosures provide participants with information about their individual benefits, often disclosures also serve to hold plan fiduciaries to account for their actions. Participants' calls to Labor focus on their individual benefits and retirement security. Plan sponsor disclosures that provide benefit information specific to a participant or provide information on what participant benefits are under the plan include the periodic pension benefit statement and the SPD. According to representatives of plan sponsors, associations, and participant advocacy groups we interviewed, these are the most useful and important types of disclosures for participants. They can help participants secure employer matching contributions to their 401(k) plans and help participants understand to what extent their benefits can fund their retirement. Such information can help participants obtain tax benefits or avoid tax penalties.[Footnote 70] In contrast, disclosures mainly serving accountability purposes generally do not provide information specific to the retirement security of individual participants, focusing instead on aspects such as the funding or legal compliance of the plan as a whole. Concerns raised about quantity of disclosures: While requiring fiduciaries to disclose financial information about the plan may serve accountability purposes, as noted by a Labor official testifying before the EAC, the quantity of disclosures creates significant communication challenges as participants struggle with what they must or should read. For example, participants may receive a disclosure offering them an opportunity to comment on whether their plan should be tax-qualified, another notifying them that the plan has applied for a waiver of the minimum funding standard, and a summary annual report or annual funding notice providing annual plan-wide statistics. In addition, an academic researcher observed that participants do not understand what information is most relevant to their investment choices. Based on such testimony, the EAC concluded in 2009 that disclosures often go unread because participants feel overwhelmed by too much information. Side bar: Excerpt from the Model Notice of Application for a Waiver of the Minimum Funding Standard: ; "This notice is to inform you that an application for a waiver of the minimum funding standard under § 412(d) of the Internal Revenue Code (Code) and section 303 of the Employee Retirement Income Security Act of 1974 (ERISA) has been submitted by [Insert Plan Sponsor's Name] for the plan year beginning [Insert Date]. Under § 412(f)(4)(B) of the Code and section 303(e)(2) of ERISA, the Service will consider any relevant information submitted concerning this application for a waiver of the minimum funding standard. You may send this information to the following address..." Source: IRS Internal Revenue Bulletin 2004-07. [End of side bar] Our interviews with various group echoed these concerns. One participant advocate said participants are being "flooded" with information from their plans, and an association representative commented that there is too much information for it to be useful to participants. A service provider noted that at retirement, participants get at least 20 pieces of paper, which is too much information to read and act on. According to several groups we spoke with, the quantity of information diminishes the positive effects it can have for participants. Service providers and associations said participants may miss important information because they have to read through such a large quantity of other content to find it, and many participants rarely read the disclosures they receive. Furthermore, Labor officials noted that, although some plan sponsors pay all the expenses of their plans, the cost of participant disclosures in DC plans is often paid from participant accounts through added direct fees or indirect charges to plan investments. One association commented that participants would not want to receive all the currently mandated disclosures if they understood they were paying for them. Limited efforts to streamline disclosure requirements: The agencies have taken some steps to facilitate the consolidation of disclosures. For example, in 2007 Labor and IRS worked together to develop a model notice to assist plan sponsors to comply with four disclosure requirements in a single, stand-alone document.[Footnote 71] However, such examples are rare. In our review we found several instances of nearly identical statements appearing in multiple disclosures. The participant benefit statement, the disclosure of plan fees and expenses, and the QDIA are all required to contain explanations of limitations on the rights of participants to direct investments. Similar statements about plan funding appear in both the annual funding notice and the notice of critical or endangered status. [Footnote 72] The SPD, required of most DB and DC plans, generally includes a description of eligibility requirements, benefits, and circumstances in which benefits may be reduced, while other disclosures also contain similar information. But, in other cases, the information in disclosures is fairly unique. For example, we reviewed selected disclosures from samples provided by a plan sponsor organization, comparing the content of two disclosures provided to employees when they separate from employment with six disclosures that are provided routinely to all participants once they join a plan, and we found minimal overlap across these disclosures. Another way that disclosures can be consolidated is by combining them in a single mailing. Labor and IRS officials said they generally allow disclosures to be combined in a single mailing. However, plan sponsors may find the guidance is unclear. According to one service provider, there is no explicit, broadly applicable guidance encouraging the practice when disclosure schedules align, and current industry practice is to keep them separate. Certain nonroutine disclosures cannot be combined for practical purposes, as they are timed to coincide with a triggering event that may not coincide with another mailing. Moreover, in one case, combining disclosures is expressly discouraged. The preamble to the final QDIA notice regulations states that if the QDIA notice were combined with the SPD, the length and complexity of SPDs might lead to participants missing the QDIA information. According to Labor officials it is not clear that participants benefit from receiving a large quantity of information all at once. As noted above, the quantity of content participants receive can be overwhelming and cause participants to miss important information because there is so much to read. Nevertheless, agencies could make further efforts to streamline disclosures. For example, we previously recommended that Congress consider consolidating the annual funding notice and the notice of critical or endangered status to eliminate duplication.[Footnote 73] One association representative we spoke with noted that agencies could provide regulatory relief to sponsors by allowing them to refer participants to the SPD for information, as is already done to some extent, rather than repeating it in various disclosures. Participants often lack basic information: While participants may receive a large quantity of content from their plans, our review of Labor's call center data indicates that many participants call with basic questions about their rights to benefits. Much of this information is included in the plan's SPD. In a framework of disclosures intended to help participants protect their rights and benefits under their plans, the SPD is required to explain those rights and benefits. Labor described the content of the SPD, along with the relevant summary of the material modifications, to OMB in 2013 as the single most important source of information about a plan for the plan participants.[Footnote 74] Plan sponsors are required to provide SPDs to participants when they initially join the plan, but then plan sponsors are only required to provide SPDs again to participants every 5 years if the plan has changed, or 10 years if the plan has not changed.[Footnote 75] Also, unlike parts of DB plan annual reports, the SPD is not required to be posted to plan sponsor intranet sites.[Footnote 76] As a result, if participants have questions and cannot find their SPDs, Labor's benefits advisors must first help participants obtain a copy of their SPDs by advising participants to mail a certified letter to their plan administrator requesting one, and occasionally contacting employers on their behalf.[Footnote 77] The rollover notice, with information on distribution options, conveys information that is important for participants to have, especially when deciding whether to take a distribution from their plans. However, participants may not be receiving timely access to this information. As we recently reported, IRS regulations do not require plans to provide the requisite distribution information when a participant separates from employment, but rather within a specified window of time before the receipt of a distribution. We identified no requirements to ensure that participants receive timely information on their distribution options before they make a decision to take a distribution.[Footnote 78] Disclosures Are Often Confusing: ERISA's and IRC's disclosure requirements often specify that notices be written in a manner calculated to be understood by the average participant (see appendix III). For other disclosures without this specific language about readability in the underlying statute, Labor officials noted that ERISA's basic fiduciary standards would also require that plan sponsors consider how understandable participant disclosures are as part of their fiduciary duty.[Footnote 79] Nevertheless, our review found that disclosures often contain complex content and are difficult to understand. The complexity of disclosures varies, and some model notices also fall short. According to agency officials, ERISA agencies do little to enforce the statutes' readability provisions. Complexity of disclosures varies: While complex information is required to be included in the disclosures in many cases by statute, the readability of disclosures also depends, in part, on how the plan sponsor writes them. Representatives of one plan sponsor we spoke with said they use field tests and polls to determine whether their communication with participants is effective, and they strive to write disclosures at an eighth-grade reading level. A participant advocacy group representative commented that some plan administrators definitely do a better job than others in terms of the readability of their disclosures. However, representatives from two participant advocacy groups we interviewed told us that the content of certain disclosures is confusing for participants. For example, one group commented that some notices are written in language that even lawyers cannot understand. A service provider we interviewed commented that although the model blackout notice (a nonroutine disclosure that may be triggered for DC plans) is seven paragraphs long, sponsors should be able to communicate its content in only three or four sentences. To gain some insight on participant perspectives, we also analyzed calls participants made to Labor's call center during fiscal year 2012. We found that participants often had questions because they did not understand the content of a disclosure or why it was sent to them. Some callers stated that they did not know how to interpret a disclosure and were frustrated or alarmed, suspecting their benefits might be in jeopardy. Table 2 summarizes some of the comments made in our interviews with plan sponsor representatives and participant advocacy groups, in participant calls to Labor, and in EAC reports about the challenges related to three disclosures that were frequently mentioned: the summary annual report, the annual funding notice, and the notice of an IRS request for determination. Table 2: Comments on Disclosures Identified as Difficult to Understand: Disclosure: Summary annual report; Description: Among other plan information, the summary annual report provides DC and some DB plan participants the total assets, income, expenses, and the number of participants in the plan; Selected comments about challenges with disclosures: * Witnesses before an EAC working group in 2005 said that the text format of the summary annual report is an ineffective way to present financial data, and that the disclosure should be eliminated if it is not redesigned to be more useful and informative. Disclosure: Annual funding notice; Description: This notice provides DB plan participants with actuarial data about the plan's funding, including the plan's funding target attainment percentage (FTAP) for the last 3 years and general information about the benefits guaranteed by the PBGC. The notice provides statements on the plan's credit balance and detailed information about how the plan's assets are invested; Selected comments about challenges with disclosures: * Representatives from an association of actuaries told us the notice is largely not read or not understood, and only a few of the numbers in the notice could conceivably be useful; * A participant called Labor's call center saying he received this notice regarding the Pension Protection Act of 2006 and wanted to know if he had lost his benefits. Disclosure: Notice to interested parties of application for advanced determination regarding the qualifications of a plan under the IRC; Description: This notice provides DC and DB plan participants an opportunity to comment on whether their plans meet requirements in the IRC. It can be provided with respect to a plan's initial qualification, amendment, termination, or partial termination; Selected comments about challenges with disclosures: * According to Labor benefits advisors, participants are often confused by this notice; * IRS officials said they sometimes get responses about multiemployer plans from labor organizations, rather than individual participants; * Labor officials commented that the complex nature of tax qualification requirements make it difficult for the average pension plan participant to exercise this right. Source: Agency documents, Interviews with officials at federal agencies and an association, participant call data, and the 2005 EAC Report of the Working Group on Communications to Retirement Plan Participants. [End of table] Some agency model notices fall short: Labor, PBGC, and IRS have created templates (referred to as "model notices") for plan sponsors to follow when writing all or a portion of certain disclosures to assist them in complying with the law.[Footnote 80] While plan sponsors are not required to use model notices, those testifying before the EAC, as well as various groups we spoke with, indicated that model notices are widely used and helpful to both plans sponsors and participants.[Footnote 81] Thus, to further evaluate the readability of disclosures to participants, we assessed the extent to which ten of these model notices adhered to the federal plain language guidelines--a handbook federal agencies are encouraged to use when communicating with the public.[Footnote 82] We found that several of the model notices failed to meet criteria we developed based on these guidelines, more often than not.[Footnote 83] For example: * Explain technical terms: Several model notices use technical terms without explanation, and several require the reader to cross-reference other sources of information to understand the main ideas. For example, the notice of IRS request for determination invites participants to comment on whether their plan meets requirements in sections 401 and 403(a) of the IRC without further explanation of those citations. * Specify whether action is needed or advised: Several model notices do not make it clear what the participant is supposed to do with the information. The model rollover disclosure gives participants the general idea that they are to use the seven pages of information to help decide whether to roll over their retirement funds. However, it does not state clearly and up front that for tax purposes, in most circumstances, participants under 59˝ should not withdraw their retirement funds, and after that age participants should take distributions only a little at a time. Participants need to infer that from other information the disclosure provides. * Offer help for non-English speakers: None of the model notices we reviewed contain language about assistance available to non-English speakers.[Footnote 84] This includes the model notice for the summary annual report, which is required by ERISA to provide assistance to non- English speakers when enough non-English speakers participate in the plan.[Footnote 85] Side bar: Excerpt from the Model Rollover Notice: "If you do not do a direct rollover, you may still do a rollover by making a deposit into an IRA or eligible employer plan that will accept it. You will have 60 days after you receive the payment to make the deposit. If you do not do a direct rollover, the Plan is required to withhold 20% of the payment for federal income taxes (up to the amount of cash and property received other than employer stock). This means that, in order to roll over the entire payment in a 60-day rollover, you must use other funds to make up for the 20% withheld. If you do not roll over the entire amount of the payment, the portion not rolled over will be taxed and will be subject to the 10% additional income tax on early distributions if you are under age 59˝ (unless an exception applies)." Source: IRS, Notice 2009-68. [End of side bar] Finally, we also tested the model notices we identified with an automated grade-level readability test.[Footnote 86] According to the test, the reading level required for the models ranged from that of a tenth-grader to that of a college senior. Most were written above a high-school reading level (see table 3).[Footnote 87] Thus, it seems likely that the information in these disclosures would not be readily understandable to many average plan participants and that readability might present a challenge for participants, even when plan sponsors adopt the model notice developed by the agency. Table 3: Grade-Level Reading Scores for Model Notices: Disclosure: Blackout notice; Source of model notice: Labor: 29 C.F.R. § 2520.101-3(e)(2); Grade-level reading score: 15.7. Disclosure: ERISA rights statement; Source of model notice: Labor: 29 C.F.R. § 2520.102-3(t)(2); Grade-level reading score: 15.5. Disclosure: Notice to interested parties of IRS determination; Source of model notice: IRS: Revenue Procedure 2011-06; Grade-level reading score: 14.8. Disclosure: Notice of pending election of multiemployer status; Source of model notice: Labor: Model Notice of Pending Election of Multiemployer Plan Status, 71 Fed. Reg. 69,595 (Dec. 1, 2006); Grade-level reading score: 14.9. Disclosure: Diversification requirements for qualified defined contribution plans holding publicly traded employer securities; Source of model notice: IRS: Notice 2006-107; Grade-level reading score: 14.8. Disclosure: Rollover notice; Source of model notice: IRS: Notice 2009-68; Grade-level reading score: 14.4. Disclosure: Saver's credit notice[A]; Source of model notice: IRS: Announcement 2001-106; Grade-level reading score: 14.2. Disclosure: Critical status notice; Source of model notice: Labor: Model Notice of; Multiemployer Plan in Critical; Status, 73 Fed. Reg. 15,692 (Mar. 25, 2008); Grade-level reading score: 14.0. Disclosure: Annual funding notice[B]; Source of model notice: Labor: Field Assistance Bulletin 2009-01[B]; Grade-level reading score: 13.4. Disclosure: Notice of application to waive the minimum funding standard; Source of model notice: IRS: Bulletin 2004-7 Appendix A; Grade-level reading score: 15.1. Disclosure: Summary annual report; Source of model notice: Labor: 29 C.F.R. § 2520.104b-10(d)(3); Grade-level reading score: 12.3. Disclosure: Notice of intent to terminate (distress termination); Source of model notice: PBGC: Appendix B to PBGC distress termination instructions; Grade-level reading score: 11.1. Disclosure: Notice of termination of individual account plan; Source of model notice: Labor: 29 C.F.R. § 2550.404a-3 Appendix; Grade-level reading score: 11.2. Disclosure: 40. Notice related to qualified automatic contribution arrangements, eligible automatic contribution arrangements, and qualified default investment alternatives; Source of model notice: IRS: Website [hyperlink, http://www.irs.gov/pub/irs-tege/sample_notice.pdf]; Grade-level reading score: 10.9. Disclosure: Notice of intent to terminate (standard termination); Source of model notice: PBGC: Appendix B to PBGC standard termination instructions; Grade-level reading score: 10.4. Disclosure: 2. Model comparative chart on investment options; Source of model notice: Labor: 29 C.F.R. § 2550. 404a-5 Appendix; Grade-level reading score: 9.7. Sources: Agency regulations and guidance, as cited above, and GAO analysis using the Flesch-Kincaid Grade-Level (FKGL) tool. (For more information on this tool and our analysis, see appendix I.) [A] IRS Announcement 2001-106 encourages employers to tell their employees about this available tax credit, and offers the model notice as an option to accomplish that. The notice is not required to be provided by law. [B] Labor has proposed a new model for this disclosure (75 Fed. Reg. 70,625, Nov. 18, 2010). Although the regulations with this new model have not yet been finalized, Labor officials noted that plan sponsors could use this model, if they wish. The FKGL score for this revised notice is slightly lower: 12.8. [End of table] Readability provisions are not vigorously enforced: An additional challenge to participant disclosure understandability is that Labor, IRS, and PBGC do not vigorously enforce the readability standards in ERISA or the IRC. We identified 11 disclosures that are required by ERISA or the IRC to be understandable by an average plan participant (see appendix III). However, agency officials said their agencies had not issued any guidance, other than the model notices, on how to comply with these standards. One of the recommendations of the EAC in 2005 was to enhance or create mechanisms to enforce the regulatory requirement that the SPD be understandable by the average plan participant. For that disclosure, if Labor investigates a plan, officials said that investigators will consider whether the plan's SPD is in compliance with ERISA readability standards. Similarly, IRS officials said that if a plan is audited and the examiner reads a notice and cannot tell what it says, that might be noted in the audit. In addition, according to Labor officials, disclosure readability is in part addressed through public comments on proposed regulations. Labor officials said that sometimes readability can be improved with information collected through the focus groups that Labor increasingly conducts during the rulemaking process.[Footnote 88] IRS officials said they also try to make model notices readable, and that model notices are very closely vetted on a word-by-word basis. At the same time, they noted that the complexity of the content that disclosures are often required by statute to contain can make them difficult to read, even when the IRC requires that they be understandable by the average plan participant. PBGC officials said that they are working with Labor to make some content in the model annual funding notice more understandable, but that the statutory requirements for the content in the notice place limitations, in effect, on its readability. Nevertheless, all three ERISA agencies acknowledged that enforcing the specific readability standards in the statutes is not a priority, and none had a mechanism to determine whether disclosures are understandable to an average participant. Conclusions: The increasingly complex world of private sector pension plans, coupled with the important role these plans play in the retirement security of millions of Americans, has made access to clear information about plan details more important than ever. Agencies use information from plan sponsors for oversight purposes, while participants need access to plan information to manage their retirement accounts and make key retirement decisions. Therefore, enhancing plan sponsor compliance and the efficiency and effectiveness of reports and disclosures is of the utmost importance. Retirees with vested benefits in a former employer's plan could receive more accurate and up-to-date information if responsibility for collecting and managing information on participants' deferred vested benefits was more centralized. The current system splits the responsibility for collecting this information (assigned to IRS) from the responsibility for retaining that information (assigned to SSA), but leaves Labor responsible for helping plan participants understand and follow up on notices with this information. With no agency fully responsible for the data throughout this process, individuals with vested benefits in former employers' plans may continue to receive outdated information. As the agency with primary responsibility for administering and enforcing pension plan reporting requirements under ERISA, Labor may be best situated to take on this responsibility, perhaps in partnership with PBGC, given that agency's expanded role in maintaining a database of plans' missing participants. The increased complexity of retirement plans and the vast financial resources they contain necessitates a complex system of reporting and disclosures to ensure oversight and transparency. Plan sponsors do not need to understand the details of reporting and disclosure requirements for which they are not responsible, but they must have sufficient information to determine which requirements apply to them. Currently, there is no single comprehensive and regularly updated resource to help sponsors comply with reporting and disclosure requirements. Providing sponsors with a well-organized and complete guide would promote compliance and help ensure that agencies and participants receive the required information when needed. For participants, understanding their rights and benefits, as provided in the SPD for their plan, is crucial to safeguarding and managing their retirement security. Currently, plan sponsors are required to provide participants with the SPD once every 5 years if the plan has changed, or 10 years if the plan has not changed. In the intervening time, participants may have difficulty finding the information, as updates may be provided intermittently through summaries of material modifications. Many plan sponsors already provide plan information to participants securely through dedicated intranet sites. Requiring plan sponsors to include the SPD and any summaries of material modifications on such a site would provide participants continuous access to plan details. Finally, participants must understand disclosures to use the information to protect their rights and benefits. The complex nature of retirement plans and the detailed information that plan sponsors are required to disclose may make ERISA's readability requirements challenging for plan sponsors to meet and for agencies to enforce. Thus, although Congress included many provisions in ERISA and in the IRC requiring that disclosures be written so that the average plan participant can understand them, Labor, IRS, and PBGC officials acknowledged that enforcement of these provisions has not been a priority. Setting clear criteria for statutory readability standards, enforcing them, and revising model notices as appropriate may help ensure that, in the future, disclosures are clearer and easier to read for participants who are trying to manage their accounts to better secure their retirement. Furthermore, such measures may also reduce the costs associated with Labor's benefits advisors responding to participant questions. Matter for Congressional Consideration: To increase the accuracy of "potential private pension benefit information" notices that SSA sends to Social Security claimants, Congress should consider legislation shifting responsibility and necessary resources to Labor for (a) electronically collecting form 8955-SSA information on participants' deferred vested benefits, (b) maintaining an accurate federal database of those benefits, and (c) periodically sending SSA accurate information about such benefits for recent Social Security claimants identified by SSA, so that SSA may provide notices to retirees. Recommendations for Executive Action: To ease the burden on plan sponsors, enhance compliance, and help ensure that disclosures to participants are written in a manner that can be understood by the average participant, Labor, IRS, and PBGC should work together to: 1) Create and regularly update a comprehensive online tool for plan sponsors to search for the reports and disclosures they are required to provide based on plan type, design, and circumstances. 2) Define criteria for complying with the readability provisions in ERISA and the IRC, and apply the criteria to agency-generated model notices as well as those developed by plan sponsors. As part of these criteria, consider requiring clear, simple, brief highlights at the beginning of disclosures, reflecting federal plain language guidelines. To better ensure plan participants have access to information about their rights and benefits, as currently in force under their plans, Labor should: 3) Direct plan sponsors to post to any intranet website maintained by the employer, as soon as determined feasible by Labor, a copy of the most current summary plan description (SPD) and any summary of material modifications issued subsequent to that SPD. Agency Comments and Our Evaluation: We provided a draft of this report to the Department of Labor, Department of the Treasury and Internal Revenue Service, Pension Benefit Guaranty Corporation, and Social Security Administration for review. All the agencies generally agreed with our report. (See their written comments, which are reproduced in appendix IV through VII. Treasury and IRS provided their comments jointly.) Labor and Treasury/IRS provided similar comments regarding our first recommendation, agreeing to work together with PBGC to explore the necessity and viability of providing a comprehensive online tool that would enable plan sponsors to search for required reports and disclosures based on plan type, design, and circumstances. In technical comments, Labor noted that the agency expects to publish an updated version of its reporting and disclosure guide for employee benefit plans soon. We appreciate Labor's and Treasury/IRS' efforts and believe that a well-designed and searchable tool would be invaluable to the broad sponsor community. Labor and Treasury/IRS also provided similar comments regarding our second recommendation, to define criteria for complying with the readability provisions of ERISA and the IRC. They agreed that the subject matter of disclosures can be complicated, noting that they have increased the use of model notices to provide plan sponsors and participants with clear and understandable formats for complying with applicable requirements. However, Labor also noted that plan sponsors have expressed concern regarding liabilities that may result from ambiguities that arise when complex information is summarized or presented using plain language criteria. We agree. It is for this reason our recommendation calls for clear, simple, brief highlights to be added to--not replace--full disclosures. Such highlights could help plan sponsors comply with the provisions in ERISA and IRC that require certain disclosures to be understandable to the average plan participant, while not compromising the complex information that the disclosures must contain. Treasury/IRS also expressed interest in directing plan sponsors to use certain plain language guidelines to make disclosures more understandable. Regarding our third recommendation, to direct plan sponsors who have intranet sites for their plans to post the most current summary plan description and any subsequent summaries of material modifications to these sites Labor noted that, in 2011, it published a request for information to explore whether and how to modify disclosure standards, taking into account current technology. Labor pointed out that ERISA was previously amended to include actuarial information and agreed to consider the benefit of such an intranet posting with respect to the summary plan description and material modifications. However, Labor also noted that it is unclear whether the agency has the statutory authority to require such online posting. We would encourage Labor to fully consider what actions it could take within the scope of its existing authority. Treasury/IRS also provided comments on the matter for congressional consideration, which asks Congress to consider legislation shifting responsibility and resources to Labor for collecting, maintaining, and periodically sending SSA the information reported on the 8955-SSA. Treasury/IRS noted that the agency is considering regulatory changes to help address the problem of participants receiving notices from SSA describing vested benefits that have already been paid. To improve the accuracy of data, the agency has issued proposed regulations that would require the 8955-SSA to be filed electronically, to the extent allowable under the current law, and the agency is working on a project, listed in its 2013-2014 priority guidance plan, that would allow the 8955-SSA to satisfy the requirement that sponsors provide an annual participant disclosure of separated participants with deferred vested benefits. While we applaud these efforts to improve the accuracy of 8955-SSA data, we remain concerned that such efforts only address part of the problem. The data from the 8955-SSA must also be maintained and updated over time to produce accurate notices once individuals are ready to retire. We continue to believe that it would be preferable to more fully centralize responsibility for collecting and maintaining these data and that Labor, perhaps in partnership with PBGC, may be best situated to assume responsibility for these tasks. PBGC commented more generally that pension law is highly prescriptive and ERISA agencies could implement the results of their cooperative efforts more effectively if they were given more discretion under the law. Each agency also provided technical comments, which we incorporated as appropriate. As arranged with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days from the date of this letter. At that time, we will send copies to the Secretary of Labor, Secretary of the Treasury, and Director of the Pension Benefit Guaranty Corporation. In addition, the report will be available at no charge on the GAO website at [hyperlink, http://www.gao.gov]. If you or your staff members have any questions about this report, please contact me at (202) 512-7215 or jeszeckc@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix VIII. Signed by: Charles A. Jeszeck, Director: Education, Workforce, and Income Security Issues: List of Requesters: The Honorable Tom Harkin: Chairman: Committee on Health, Education, Labor, and Pensions: United States Senate: The Honorable Elizabeth Warren: United States Senate: The Honorable George Miller: Ranking Member: Committee on Education and the Workforce: House of Representatives: The Honorable Richard E. Neal: Ranking Member: Subcommittee on Select Revenue Measures: Committee on Ways and Means: House of Representatives: [End of section] Appendix I: Methodology for Analyzing the Readability of Participant Disclosures: To analyze the readability of participant disclosures, we evaluated the language in model disclosures developed by the Department of Labor (Labor) and the Internal Revenue Service (IRS) with both an automated readability tool and criteria based on federal plain language guidelines for communicating with the public. Although we found no comprehensive list of existing model notices, we identified 16 such notices through our review of laws and regulations.[Footnote 89] To estimate the reading level at which model disclosures were written, we evaluated the language in the 16 model disclosures we identified using the Flesch-Kincaid Grade-Level (FKGL) automated readability tool. The FKGL tool was developed by the Navy based on the Flesch Reading Ease test, which is one of the most widely-used, tested, and reliable formulas for calculating readability. The FKGL tool was developed primarily for adults and has been tested extensively on adult materials. It uses core measures of word length and sentence length to estimate the grade level at which the content is written. The version we used was included in the word processing software Microsoft Word. We deleted parenthetical instructions to plan sponsors from the models before we ran the analysis to focus on the readability of content intended for participants. To evaluate model disclosure readability more generally, we developed 22 criteria based on federal plain language guidelines for communicating with the public.[Footnote 90] The federal plain language guidelines is a handbook that federal agencies are encouraged to use when communicating with the public. We distilled the guidelines into 22 criteria on factors such as the organization and presentation of the content. Two GAO analysts independently coded 10 model notices on the 22 criteria and assessed whether the disclosures would be understandable to an average plan participant.[Footnote 91] When coding differences occurred, a third GAO analyst independently reviewed those cases and discussed with the team to reach agreement. [End of section] Appendix II: Required Pension Plan Reports and Disclosures: To determine what reports and disclosures private sector pension plan sponsors are required to make to federal agencies and plan participants, respectively,[Footnote 92] we compiled previously- available lists and other information about reports and disclosures from agency websites and lists from three service provider websites. The assembled information included details about who must submit information, to whom it must be provided, citations to federal laws, regulations, and guidance, available forms and model notices, and events and circumstances that trigger reports and disclosures. We then worked with officials at the agencies--Labor, IRS, and PBGC--to revise and update the list and add details about reports and disclosures through multiple steps. We then reviewed relevant federal statutes and regulations to verify selected information. These lists have been summarized below into four tables: routine reports; nonroutine reports, routine disclosures, and nonroutine disclosures. Table 5: Plan Sponsors' Routine Reports to Agencies: Name of routine report (to be provided annually unless noted otherwise): Annual return/report Form 5500[A]; Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: Defined benefit (DB) and defined contribution (DC) plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 6047(e), 6057(b), and 6058(a); * 29 U.S.C. §§ 1024; * 1365; and 29 C.F.R. § 2520.103-1; Form: Form 5500 submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual return/report 5500-SF (short form); Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB and DC small plans covering fewer than 100 participants that are 100% invested in "secure" and "easy to value" assets. Certain "one-participant plans" are permitted to file electronically the Form 5500-SF in lieu of filing the Form 5500-EZ on paper with the IRS; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 6057(b) and 6058(a); * 29 U.S.C. §§ 1024 and 1365; Form: 5500-SF submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual return/report form 5500-EZ; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans (small one- participant pension benefit plans. It may also be used by certain partnership plans and certain foreign plans); Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6058(a); Form: Form 5500-EZ must be filed by paper and mail to IRS. However, one-participant plans may satisfy their filing obligations under Code by filing Form 5500-SF electronically under EFAST2 system, if certain conditions are met. Name of routine report (to be provided annually unless noted otherwise): Annual return/report (5500) attachments (e.g. financial statements, and accountant's opinions); Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB and DC plans as required in form 5500; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1023(a)(3); Form: No form (attachments to Form 5500). Name of routine report (to be provided annually unless noted otherwise): Annual return/report (5500) schedule A--insurance information; Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB and DC large plans (100 or more participants) with benefits provided by an insurance company; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1023(a)(2) and 1024; Form: Form 5500 schedule A submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual return/report (5500) schedule C--service provider information; Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB and DC plans with service providers who rendered services to the plan or direct filing entity (DFE) during the plan or DFE year, received $5,000 or more in compensation from the plan; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1024; Form: Form 5500 schedule C submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual return/report (5500) schedule D--DFE/participating plan information; Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB and DC plans or direct filing entities (DFE) that invested or participated in certain financial instruments; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1024; Form: Form 5500 Schedule D-DFE submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual return/report (5500) schedule G--financial transaction schedules; Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB and DC large plans (100 or more participants) with loans or fixed income obligations in default or classified as uncollectible; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6058(a); * 29 U.S.C. § 1024; Form: Form 5500 Schedule G submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual return/report (5500) schedule H--large plan financial information; Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB and DC large plans (100 or more participants); Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6058(a); * 29 U.S.C. § 1024; Form: Form 5500 Schedule H submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual return/report (5500) schedule I--small plan financial information; Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB and DC small plans (fewer than 100 participants and filing the Form 5500 annual return/report, rather than the Form 5500-SF); Applicable laws, regulations, and agency guidance: * 26 U.S.C. 6058(a); * 29 U.S.C. § 1024; Form: Form 5500 Schedule I submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual return/report (5500) schedule MB; Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB and DC multiemployer plans (DC plans limited to certain money purchase plans); Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6059; * 29 U.S.C. § 1024; Form: Form 5500 Schedule MB submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual return/report (5500) schedule R--retirement plan information; Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB and DC large plans (100 or more participants) that have distributed benefits during the plan year; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6058(a); * 29 U.S.C. § 1024; Form: Form 5500 schedule R submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual return/report (5500) schedule SB--plan actuarial information; Agency providing oversight and primary recipient: Labor, PBGC, and IRS; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6059; * 29 U.S.C. § 1024; Form: Form 5500 schedule SB submitted electronically using EFAST2 system. Extension obtained by filing form 5558 with IRS or by automatic extension by extending corporate tax return with IRS. Name of routine report (to be provided annually unless noted otherwise): Annual zone status certification; Agency providing oversight and primary recipient: IRS (must also be provided to plan sponsor); Plans required to provide report: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 432(b)(3); * 29 U.S.C. § 1085(b)(3); Form: No form. Name of routine report (to be provided annually unless noted otherwise): Premium filings: comprehensive premium filing; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB plans; (large plans with 500 or more participants provide the reconciliation of the estimated flat rate premium paid earlier in the year with the actual flat rate premium, plans with fewer than 500 participants provide the flat rate premium, and underfunded single-employer plans provide the variable rate premium); Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1306, 1307; * 29 C.F.R. §4007.3; Form: Electronic web-based filing using My Plan Administration Account (My PAA). Name of routine report (to be provided annually unless noted otherwise): Premium filings: estimated flat-rate premium filing; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB large plans (500 or more participants); Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1306, 1307; * * 29 C.F.R. § 4007.3; Form: Electronic web-based filing using My Plan Administration Account (My PAA). Source: GAO analysis of information provided by Labor, IRS, and PBGC. [A] For this table, schedules of the 5500 are counted as separate reports. [End of table] Table 6: Plan Sponsors' Routine Disclosures to Participants, Beneficiaries, and Alternate Payees: Name of routine disclosure (to be provided annually unless noted otherwise): Annual funding notice; Agency providing oversight and/or guidance: Labor; Special instructions about recipients and/or timing of disclosure: In addition to participants, also to be sent to labor organizations representing participants under the plan, each contributing employer in the case of a multiemployer plan, and PBGC; Plans required to provide disclosure: Defined benefit (DB) plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1021(f); * DOL FAB 2009-01 (non-enforcement policy pending further guidance); * Annual Funding Notice for Defined Benefit Plans, 75 Fed. Reg. 70.625 (Nov. 18, 2010) (proposed rule) (FAB guidance still in effect until adoption of a final rule); * DOL FAB 2013-01 (non-enforcement policy on additional single- employer plan disclosures required by MAP-21); * Pub. L. No. 112-141, § 40211(b)(2),126 Stat. 405, 848-49 (2012). Name of routine disclosure (to be provided annually unless noted otherwise): Effective opportunity to make or change elective deferrals; Agency providing oversight and/or guidance: IRS; Special instructions about recipients and/or timing of disclosure: [Empty]; Plans required to provide disclosure: Defined contribution (DC) plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(k) (11)(B)(iii)(II) and 403(b); * 26 C.F.R. §§ 1.401(k)-1(e)(2)(ii) and 1.403(b)-5(b)(2). Name of routine disclosure (to be provided annually unless noted otherwise): Eligible automatic contribution arrangement notice (EACA); Agency providing oversight and/or guidance: IRS; Special instructions about recipients and/or timing of disclosure: [Empty]; Plans required to provide disclosure: DC plans that have eligible automatic contribution arrangements; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 414(w)(4). Name of routine disclosure (to be provided annually unless noted otherwise): Participant fee disclosures (404(a)); Agency providing oversight and/or guidance: Labor; Special instructions about recipients and/or timing of disclosure: To be sent annually for plan-related and investment-related; quarterly for administrative and individual expenses actually charged to participants' accounts; on or before the first date a new participant can first direct his or her investments; Plans required to provide disclosure: DC plans administrators of participant-directed individual account plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 2550.404a-5 plan-related information may be included in a timely furnished summary plan description under 29 U.S.C. § 1022; * Administrative and individual expenses actually charged to participants' accounts may be included in quarterly benefit statements under 29 U.S.C. § 1025. Name of routine disclosure (to be provided annually unless noted otherwise): Multiemployer pension plan summary plan information; Agency providing oversight and/or guidance: Labor; Special instructions about recipients and/or timing of disclosure: Rather than to participants, to be sent to contributing employers and employee organizations; Plans required to provide disclosure: DB multiemployer plans (plan administrator); Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1024(d). Name of routine disclosure (to be provided annually unless noted otherwise): Notice for fiduciary relief for investments in qualified default investment alternatives (QDIA); Agency providing oversight and/or guidance: Labor; Special instructions about recipients and/or timing of disclosure: Initial notice to be provided upon eligibility to participate in the plan, then annually thereafter; Plans required to provide disclosure: DC plans and participant directed DC plans that invest contributions on behalf of participants who fail to give investment direction; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1104(c)(5); * 29 C.F.R. § 2550.404c-5; * (DOL) FAB 2008-3. Name of routine disclosure (to be provided annually unless noted otherwise): Notice of availability of investment advice; Agency providing oversight and/or guidance: Labor; Special instructions about recipients and/or timing of disclosure: [Empty]; Plans required to provide disclosure: DC plans providing investment advice by asset managers who otherwise receive revenue from the investment of the plan's assets--e.g. a fiduciary advisor; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1108(g)(6). Name of routine disclosure (to be provided annually unless noted otherwise): Notification to substantial employers; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients and/or timing of disclosure: Rather than to participants, to be sent to substantial employers; Plans required to provide disclosure: DB single employer plans (plan administrator of plans with at least 2 contributing sponsors not under common control); Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1366. Name of routine disclosure (to be provided annually unless noted otherwise): Periodic pension benefit statement; Agency providing oversight and/or guidance: Labor; Special instructions about recipients and/or timing of disclosure: Individual account plans that permit participants and beneficiaries to direct the investment of assets in their account must provide a pension benefit statement at least once each calendar quarter; plans that do not provide participants or beneficiaries a right to direct their investments must provide it at least once each calendar year; and DB plans must provide it at least once every 3 years; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1025; * DOL FAB 2006-3 and 2007-3. Name of routine disclosure (to be provided annually unless noted otherwise): Qualified automatic contribution arrangements (QACA) notice; Agency providing oversight and/or guidance: IRS; Special instructions about recipients and/or timing of disclosure: [Empty]; Plans required to provide disclosure: DC plans with QACA safe harbor; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 401(k)(12)(D) and (13)(E); * 26 C.F.R. § 1.401(k)-3(j). Name of routine disclosure (to be provided annually unless noted otherwise): Summary annual report (SAR); (contains information from applicable Form 5500); Agency providing oversight and/or guidance: Labor; Special instructions about recipients and/or timing of disclosure: In addition to participants, also to be sent to Labor on request; Plans required to provide disclosure: DC and some DB plans (DB plans that are not required to furnish an ERISA § 101(f) (29 U.S.C. § 1021(f)) annual funding notice); Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1024(b)(3); * 29 C.F.R. §§ 2520.104b-10, 2520.104-46(b) and 2520.104b-1. Name of routine disclosure (to be provided annually unless noted otherwise): Summary plan description (SPD); Agency providing oversight and/or guidance: Labor; Special instructions about recipients and/or timing of disclosure: In addition to participants, also to be sent to Labor on request. To be sent every 5 years, if SPD was updated; every 10 years, otherwise; Plans required to provide disclosure: DB and DC plans except top hat plans and SEPs that meet the conditions for an alternative method of compliance in 29 C.F.R. §§ 2520.104-23, 2520.104-48 or 2520.104-49. SIMPLEs must comply with disclosure requirements in 29 U.S.C. § 1021; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1022 and 1024(a)(6), (b)(1), (b)(2), (b)(4) and (c); * 29 C.F.R. §§ 2520.102-2, 2520.1; * 02-3, 2520.104b-1, 2520.104b-2 and 2520.104b-3. Source: GAO analysis of information provided by Labor, IRS, and PBGC. [End of table] Table 7: Plan Sponsors' Nonroutine Reports to Agencies: Name of nonroutine report: Advance notice of reportable events: Application for minimum funding waiver; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: Defined benefit (DB) single-employer plans except public companies or plans with less than $50 million of unfunded vested benefits (UBVs) that are 90% funded on a vested benefit basis. Waivers may apply to other plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.61 and 4043.66; Form: Form 10-Advance; Triggering event: Application for minimum funding waiver. Name of nonroutine report: Advance notice of reportable events: bankruptcy or insolvency; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans except public companies or plans with less than $50 million of unfunded vested benefits (UBVs) that are 90% funded on a vested benefit basis. Waivers may apply to other plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.61 and 4043.68; Form: Form 10-Advance; Triggering event: Bankruptcy or insolvency. Name of nonroutine report: Advance notice of reportable events: change in contributing sponsor or controlled group; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans except public companies or plans with less than $50 million of unfunded vested benefits (UBVs) that are 90% funded on a vested benefit basis. Waivers may apply to other plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.61 and 4043.62; Form: Form 10-Advance; Triggering event: Change in plan sponsor or controlled group. Name of nonroutine report: Advance notice of reportable events: extraordinary dividend or stock redemption; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans except public companies or plans with less than $50 million of unfunded vested benefits (UBVs) that are 90% funded on a vested benefit basis. Waivers may apply to other plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.61 and 4043.64; Form: Form 10-Advance; Triggering event: Extraordinary dividend or stock redemption. Name of nonroutine report: Advance notice of reportable events: liquidation; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans, except public companies or plans with less than $50 million of unfunded vested benefits (UBVs) that are 90% funded on a vested benefit basis. Waivers may apply to other plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.61 and 4043.63; Form: Form 10-Advance; Triggering event: Distress. Name of nonroutine report: Advance notice of reportable events: loan default; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans except public companies or plans with less than $50 million of unfunded vested benefits (UBVs) that are 90% funded on a vested benefit basis. Waivers may apply to other plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.61 and 4043.67; Form: Form 10-Advance; Triggering event: Distress, employer and plan sponsor. Name of nonroutine report: Advance notice of reportable events: transfer of benefit liabilities; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans except public companies or plans with less than $50 million of unfunded vested benefits (UBVs) that are 90% funded on a vested benefit basis. Waivers may apply to other plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.61 and 4043.65; Form: Form 10-Advance; Triggering event: Change in plan sponsor. Name of nonroutine report: Annual disclosure of financial and actuarial information (4010); Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans with one of the following conditions during an information year: funding target attainment percentage (FTAP) less than80% for any plan in controlled group OR missed required contributions exceed $1M (statutory lien), OR funding waivers still outstanding, waived amount over $1M; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1310; * 29 C.F.R. pt. 4010; Form: E-4010 (must be filed electronically using PBGC web-based software at [hyperlink, http://www.pbgc.gov/e4010]); Triggering event: Underfunding. Name of nonroutine report: Annual registration statement identifying separated participants with deferred vested benefits (8955-SSA); Agency providing oversight and primary recipient: IRS (IRS forwards information to SSA); Plans required to provide report: DB and defined contribution (DC) plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6057(a); * IRS Announcement 2011-21; Form: IRS form 8955-SSA; Triggering event: Participants who are terminated and not paid out. Name of nonroutine report: Application for a waiver of the minimum funding standard (private letter ruling); Agency providing oversight and primary recipient: IRS (must also be provided to plan participants, beneficiaries, alternate payees, or employee organizations); Plans required to provide report: DB plans and DC money purchase plans; Applicable laws, regulations, and agency guidance: * 26 C.F.R. § 412(c); * Rev. Proc. 2004-15 and other revenue procedures updated annually; Form: No form; Triggering event: Underfunding. Name of nonroutine report: Application for approval of master or prototype (M&P) or volume submitter defined benefit plan (VSP); Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(a), 414(j) and 501(a); * Rev Proc. 2011-49; Form: Form 4461 A; Triggering event: Application for approval for M&P or VSP DB Plans. Name of nonroutine report: Application for approval of master, prototype, or volume submitter defined contribution plan; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(a) and 501(a); * Revenue procedures updated annually; Form: Form 4461 B; Triggering event: Application for approval for M&P or VSP DB Plans. Name of nonroutine report: Application for determination for adopters of master, prototype, or volume submitter plans; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans that include a minor modification to the pre-approved volume submitter plan language; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(a) and 501(a); * Rev Proc 2007 44; * Other revenue procedures updated annually; Form: 5307; Triggering event: Tax exempt status. Name of nonroutine report: Application for determination for employee benefit plan; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC individually designed plans and any related trusts; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(a) and 501(a); * Annual Rev. Proc. 20XX-6; 2005-66 and Rev Proc 2007-44; * Other revenue procedures updated annually; Form: 5300; Triggering event: Tax exempt status (Determination letter application for an individually designed plan). Name of nonroutine report: Application for determination for terminating plans; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans, other than multi- employer plans covered by PBGC insurance; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 411(d)(3); * Revenue procedures updated annually; Form: Forms 5310, 6088, and 8717; Triggering event: Termination. Name of nonroutine report: Application for determination of employee stock ownership plan (ESOP); Agency providing oversight and primary recipient: IRS; Plans required to provide report: DC ESOP plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(a) and 501(a); * Revenue procedures updated annually; Form: Form 5309 - attachment to Form 5300; Triggering event: Tax exempt status for ESOP plan. Name of nonroutine report: Application for extension of time to file certain employee plan returns; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6081(a); * 29 C.F.R. § 1.6081-1(a); Form: Form 5558; Triggering event: Extension for 5500, 8955-SSA, or 5330. Name of nonroutine report: Application for group trust or pooled trust ruling; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC (Group or pooled trust sponsors only); Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(a) and 501(a); * Rev. Rulings 81-1000, 2004-67, and 2011-1; * Other revenue procedures updated annually; Form: Form 5316; Triggering event: Tax exempt status. Name of nonroutine report: Certification of intent to adopt pre- approved plan; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(a) and 501(a); * Rev. Proc. 2005-66 and 2007-44; * Other revenue procedures updated annually; Form: Form 8905: Certification of Intent to Adopt Pre-approved Plan. Attachment to Forms 5300, 5307, or 5310; Triggering event: Tax exempt status (adoption of pre-approved plan). Name of nonroutine report: Change in funding method. Private Letter Ruling; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 412(d)(1); * Rev. Proc. 2000-40 and 2000-41; * Other revenue procedures updated annually; Form: No form; Triggering event: Change in funding. Name of nonroutine report: Distributable benefits from employee pension benefit plans; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(a) and 411(d)(3); * Revenue procedures updated annually; Form: Form 6088 - attachment to Form 5310 or Form 5300 if collectively bargained termination; Triggering event: Termination with underfunding. Name of nonroutine report: Excise taxes related to employee benefit plans; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 4971, 4972, 4975, 4978 and 4979A; Form: Form 5330; Triggering event: Violation of IRC provisions on employee benefit plans. Name of nonroutine report: Fiduciary class exemption notice; Agency providing oversight and primary recipient: Labor; Plans required to provide report: DB and DC plans (subject to specified exceptions); Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 2550.408b-2(c)(1)(ix); Form: Sample available; Triggering event: Service provider fails to provide plan administrator plan level fee disclosure as required by ERISA 408(b)(2) and 29 C.F.R. 2550.408b-2. Name of nonroutine report: Notice of benefit suspension for terminated and insolvent plans; Agency providing oversight and primary recipient: PBGC (must also be provided to participants and beneficiaries); Plans required to provide report: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1441(d)(3); * 29 C.F.R. § 4281.32; Form: No form; Triggering event: Insolvency of terminated plans. Name of nonroutine report: Notice of insolvency and annual update: terminated plan; Agency providing oversight and primary recipient: PBGC (must also be provided to participants and beneficiaries); Plans required to provide report: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. §§ 4281.43 and 4281.44; Form: No form; Triggering event: Insolvency of terminated plans. Name of nonroutine report: Notice of insolvency benefit level for terminated plans; Agency providing oversight and primary recipient: PBGC (must also be provided to participants and beneficiaries expected to be in pay status during each insolvency plan year); Plans required to provide report: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. §§ 4281.45 and 4281.46; Form: No form; Triggering event: Insolvency of terminated plans. Name of nonroutine report: Notice of insolvency: reorganization; Agency providing oversight and primary recipient: PBGC (must also be provided to IRS, employers, employee organizations, participants, and beneficiaries; Plans required to provide report: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1426(e)(I); * 29 C.F.R. § 4245.3; Form: No form; Triggering event: Insolvency of plan in reorganization (without termination). Name of nonroutine report: Notice of mass withdrawal to PBGC and certifications; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. §§ 4041A.11, 4219.11(b)(5), 4219.17(c) and (g), and 4219.18(g); Form: No form; Triggering event: Change in employer (withdrawal of all or substantially all employers) (Not necessary if notice of termination was sent, 29 C.F.R. § 4219.17(f)). Name of nonroutine report: Notice of merger; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1411(b)(1); * 29 C.F.R. § 4231.8; Form: No form; Triggering event: Merger (combining assets and liabilities into one plan) of two or more plans. Name of nonroutine report: Notice of merger, consolidation, spinoff, or transfer of plan assets or liabilities to another plan; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans (except multi- employer plans covered by PBGC insurance); Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6058(b); * Revenue procedures updated annually; Form: form 5310-A; Triggering event: Change in plan sponsor (merger, consolidation, spinoff or asset transfer). Name of nonroutine report: Notice of qualified separate lines of business (QSLOB); Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 414(r); * Revenue procedures updated annually; Form: Form 5310-A; Triggering event: Elects to be treated as QSLOB. Name of nonroutine report: Notification of resource benefit level; Agency providing oversight and primary recipient: PBGC (must also be provided to IRS, employers, employee organizations, participants, and beneficiaries); Plans required to provide report: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1426(e)(2); * 29 C.F.R. § 4245.5; Form: No form; Triggering event: Insolvency of plan in reorganization (without termination). Name of nonroutine report: Notice of substantial cessation of operations; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1362(e) and 1363(a); Form: No form; Triggering event: Change in employer (20 % reduction in active participants resulting from cessations of operations). Name of nonroutine report: Notice of termination; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. §§ 4041A.11 and 4041A.12; Form: No form; Triggering event: Termination. Name of nonroutine report: Notification of failure to make contribution to a single-employer plan; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1083(k)(4)(A); * 29 C.F.R. § 4043.81; Form: Form 200; Triggering event: Underfunding (unpaid pension payments, including interest, that exceed $1 million). Name of nonroutine report: Plan termination/distress termination: enrolled actuary certification; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(c)(2); * 29 C.F.R. § 4041.45s; Form: No form; Triggering event: Termination (distress). Name of nonroutine report: Plan termination/distress termination: notice of request to bankruptcy court to approve distress termination; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(c)(2)(B)(ii); * 29 C.F.R. § 4041.41(c)(2)(iii); Form: No form; Triggering event: Termination (distress). Name of nonroutine report: Plan termination/distress termination: post- distribution certification and missing participant information; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(c)(3)(B); * 29 C.F.R. § 4041.48; Form: PBGC 602 and schedule MP (if plan has missing participants); Triggering event: Termination (distress). Name of nonroutine report: Plan termination/standard termination: termination notice; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(b)(2)(A); * 29 C.F.R. § 4041.25; Form: form 500, schedules EA-S and REP-S if designating a representative; Triggering event: Termination (standard). Name of nonroutine report: Post-distribution certification for standard terminations and missing participant information; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(b)(3)(A) and (B); * 29 C.F.R. §§ 4041.29 and 4050.6(a); Form: Form 501 & Schedule MP; Triggering event: Termination (standard). Name of nonroutine report: Post-event notice of reportable events: active participant reduction; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.23; Form: Form 10-Post-event notification; Triggering event: Active participant reduction. Name of nonroutine report: Post-event notice of reportable events: application for minimum funding waiver; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.33; Form: Form 10-Post-event notification; Triggering event: Underfunding (application for minimum funding). Name of nonroutine report: Post-event notice of reportable events: bankruptcy or insolvency; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.35; Form: Form 10-Post-event notification; Triggering event: Bankruptcy or insolvency. Name of nonroutine report: Post-event notice of reportable events: change in contributing sponsor or controlled group; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.29; Form: Form 10-Post-event notification; Triggering event: Change in plan sponsor or controlled group. Name of nonroutine report: Post-event notice of reportable events: declaration of extraordinary dividend or stock redemption; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.31; Form: Form 10-Post-event notification; Triggering event: Employer redemption of dividend or stock. Name of nonroutine report: Post-event notice of reportable events: distribution of $10,000 or more to a substantial owner, causing plan to have unfunded vested benefits; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.27; Form: Form 10-Post-event notification; Triggering event: Underfunding[A]. Name of nonroutine report: Post-event notice of reportable events: failure to make required minimum funding payment by due date; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.25; Form: Form 10-Post-event notification; Triggering event: Underfunding. Name of nonroutine report: Post-event notice of reportable events: inability of plan to pay benefits when due; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.26; Form: Form 10-Post-event notification; Triggering event: Underfunding. Name of nonroutine report: Post-event notice of reportable events: liquidation; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.30; Form: Form 10-Post-event notification; Triggering event: Distress. Name of nonroutine report: Post-event notice of reportable events: loan default; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.34; Form: Form 10-Post-event notification; Triggering event: Distress. Name of nonroutine report: Post-event notice of reportable events: transfer of benefit liabilities; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1343; * 29 C.F.R. §§ 4043.20 and 4043.32; Form: Form 10-Post-event notification; Triggering event: Change in plan sponsor. Name of nonroutine report: Report of withdrawal of substantial employer; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1363(a); Form: No form[B]; Triggering event: Change in employer (withdrawal of all or substantially all employers). (Specifically, an employer who is a contributing sponsor has ceased operations at a facility with a resulting separation from employment of more than 20% of the participants in the plan or a substantial employer has withdrawn from a multiple employer plan). Name of nonroutine report: Request for change in plan/trust year; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 412(d)(1); * Revenue procedures updated annually; Form: Form 5308; Triggering event: Change in schedule (request change in plan year). Name of nonroutine report: Termination premium declaration; Agency providing oversight and primary recipient: PBGC; Plans required to provide report: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1306(a)(7); * 29 C.F.R. §§ 4006.7 and 4007.13; Form: Form T; Triggering event: Termination. Name of nonroutine report: Top hat statement filing; (Top hat plans are certain plans for select group of management or highly compensated employees); Agency providing oversight and primary recipient: Labor; Plans required to provide report: DC top hat plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 2520.104-23; Form: Content requirements found at 29 § C.F.R. 2520.104-23; Triggering event: Initiation of a top hat plan. Name of nonroutine report: User fee for employee plan determination letter request; Agency providing oversight and primary recipient: IRS; Plans required to provide report: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 7528; * Rev. Proc. 2005-66 and 2007-44; * Other revenue procedures updated annually; Form: 8717: This form is an attachment to forms 5300, 5307, 5310 and 5316; Triggering event: Tax exempt status. Source: GAO analysis of information provided by Labor, IRS, and PBGC. [A] Post-event notice of reportable events: distribution of $10,000 or more to a substantial owner, causing plan to have unfunded vested benefits. Under a recent proposed rule, the criteria for a triggering event would be revised to include either distributions to one substantial owner that exceed one percent or to all substantial owners that exceed five percent of plan assets. 78 Fed. Reg. 20,039, 20,063 (Apr. 3, 2013). [B] Report of withdrawal of substantial employer. There is no form currently, but a proposed regulation includes a form 4062-E for this purpose. 75 Fed. Reg. 48,283, 48,290 (Aug. 10, 2010). [End of table] Table 8: Plan Sponsors' Nonroutine Disclosures to Participants, Beneficiaries, and Alternate Payees: Name of nonroutine disclosure: Automatic rollover notice; Agency providing oversight and/or guidance: IRS and Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: Defined benefit (DB) and defined contribution) DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 401(a)(31)(B); * 29 C.F.R. § 2550.404a-2 (safe harbor for participant disclosures in connection with automatic rollover notice); Triggering event: Mandatory distribution. Name of nonroutine disclosure: Distribution eligible for rollover treatment notice (402(f)); Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 402(c) and (f); * 26 C.F.R. §§ 1.401(a)-21, 1.402(f)-1 and 1.408-6; * IRS Notices 2009-68 and 2010-84; Triggering event: Eligible rollover distribution. Name of nonroutine disclosure: Distributions from pensions, annuities, retirement or profit sharing plans, IRAs, insurance contracts, etc; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6047(d); * 26 C.F.R. § 31.3405(c)-1; Triggering event: Participant takes distribution. Name of nonroutine disclosure: Election to remain under prior vesting schedule; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 411(d)(10); Triggering event: Change in vesting schedule. Name of nonroutine disclosure: Employer stock diversification notice; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans that hold publicly- traded employer securities other than "freestanding" ESOPs with no 401(k) or 401(m) contributions; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 401(a)(35); * 29 U.S.C. §§ 1021(m) and 1054 (j); * IRS Notice 2006-107; Triggering event: Diversification eligibility. Name of nonroutine disclosure: ERISA 404(c) disclosure for fiduciary relief; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans. (Disclosure is sent by fiduciaries of participant-directed individual account plans to obtain fiduciary relief related to participants' investment choices); Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1104(c); * 29 C.F.R. §§ 2550.404c-1 and 2550.404a-5; Triggering event: Specific plan design. Name of nonroutine disclosure: Extension of amortization period; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to PBGC, contributing employers, and unions; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 431(d); * 29 U.S.C. § 1301(a)(21); Triggering event: Application for extension. Name of nonroutine disclosure: Investments: prospectuses; Agency providing oversight and/or guidance: SEC, FINRA, and Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans claiming 404(c) protection or allowing participant investment in employer stock; Applicable laws, regulations, and agency guidance: * 15 U.S.C. §§ 77j and 80a-24; * 29 C.F.R. § 2550.404a-5(d); Triggering event: Upon request. Name of nonroutine disclosure: Loans: amortization schedule; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 72(p); Triggering event: Participant requests loan. Name of nonroutine disclosure: Multiemployer plan information; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: In addition to participants, also to be sent to employee representative or employer obligated to contribute to the plan; Plans required to provide disclosure: DB Multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1021(k); * 29 C.F.R. § 2520.101-6; Triggering event: Upon request. Name of nonroutine disclosure: Notice of endangered or critical status plans; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to bargaining parties, PBGC, and Labor; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 432(b)(3); * 29 U.S.C. § 1085(b)(3); Triggering event: Endangered or critical status in plan year. Name of nonroutine disclosure: Notice of failure to meet minimum funding standards; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: In addition to participants, also to be sent to IRS and PBGC; Plans required to provide disclosure: DB single-employer plans and DC money purchase plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1021(d) and 1132(c)(3); Triggering event: Underfunding (failure to make missed payment within correction period). Name of nonroutine disclosure: Notice of intent to terminate the plan; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 C.F.R. § 1.7476-2; * Revenue procedures updated annually; Triggering event: Termination. Name of nonroutine disclosure: Notice of mass withdrawal to employers; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R §§ 4219.11(b)(1), 4219.16(a) and 4219.18(d); Triggering event: Change in employer (withdrawal of all or substantially all employers). Name of nonroutine disclosure: Notice of participant consent to the distribution; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 411(a)(11); * 26 C.F.R. §§ 1.401(a)-20 and 1.411(a)-11(c); Triggering event: Distribution amount exceeds mandatory cashout limit. Name of nonroutine disclosure: Notice of plan termination; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC individual account plans wanting safe harbor relief; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1104(a); * 29 C.F.R. § 2550.404a-3; Triggering event: Termination. Name of nonroutine disclosure: Notice of qualified change in investment options (QCIO); Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: In addition to participants, also to be sent to IRS and PBGC; Plans required to provide disclosure: DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1104(c)(4); Triggering event: Change in plan structure. Name of nonroutine disclosure: Notice of qualified domestic relations order (QDRO) procedures; Agency providing oversight and/or guidance: IRS and Labor; Special instructions about recipients of disclosure: Only to be sent to participants, beneficiaries, and alternate payees named in a domestic relations order; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 414(p)(6); * 29 U.S.C. § 1056(d)(3)(G) (requires a plan to establish procedures in writing); Triggering event: Marital dissolutions or actions for child or family support. Name of nonroutine disclosure: Notice of reallocation liability following mass withdrawal; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: Rather than to participants, to be sent to employers; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 4219.16(c); Triggering event: Employer mass withdrawal. Name of nonroutine disclosure: Notice of redetermination liability following mass withdrawal; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: Rather than to participants, to be sent to employers liable for redetermination on liability; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. §§ 4219.16(b) and 4219.18(e); Triggering event: Employer mass withdrawal. Name of nonroutine disclosure: Notice of Reduction in Adjustable Benefits; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to unions and contributing employers; Plans required to provide disclosure: DB multiemployer plans that are critical status; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 432(e)(8)(C); Triggering event: Critical status. Name of nonroutine disclosure: Notice of reorganization; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: Rather than to participants, to be sent to employers and employee organizations; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1422; Triggering event: Change in plan (Reorganization). Name of nonroutine disclosure: Notice of request for a waiver from minimum funding requirement; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB target benefit or money purchase plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 412(c)(6); * 29 U.S.C. § 1082(c)(6); Triggering event: Underfunding. Name of nonroutine disclosure: Notice of restriction on benefit accruals and distributions; Agency providing oversight and/or guidance: IRS and Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB Single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1021(j) and 1132(c)(4); Triggering event: Underfunding. Name of nonroutine disclosure: Notice of right to defer distribution; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 411(a)(11); * Notice To Participants of Consequences of Failing to Defer Receipt of Qualified Retirement Plan Distributions; Expansion of Applicable Election Period and Period for Notices, 73 Fed. Reg. 59,575 (Oct. 9, 2008) (proposed rule and notice of public hearing)a; Triggering event: Distribution eligibility. Name of nonroutine disclosure: Notice of right to elect not to have federal income tax withheld from distributions; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 3405(e)(10); Triggering event: Distribution eligibility. Name of nonroutine disclosure: Notice of safe harbor discontinuance; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC safe harbor plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 401(k)(12) and(13); * 26 C.F.R. § 1.401(k)-3(g); Triggering event: Discontinuance of safe harbor 401(k) contributions. Name of nonroutine disclosure: Notice of significant reduction in the rate of future benefit accruals; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to contributing employer and certain employee organizations; Plans required to provide disclosure: DB and DC plans subject to I.R.C § 412; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 4980F(e); * 29 U.S.C. § 1054(h); * 26 C.F.R. § 54.4980F-1; Triggering event: Amendment of significant reduction in future benefit accrual. Name of nonroutine disclosure: Notice of suspension of benefit upon reemployment of retiree; Agency providing oversight and/or guidance: IRS and Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 411(a)(3)(B); * 29 U.S.C. § 1053(a)(3)(B); * 29 C.F.R. § 2530.203-3(b)(4); Triggering event: Reemployed after retirement. Name of nonroutine disclosure: Notice of transfer of excess pension assets to retiree health benefit account; Agency providing oversight and/or guidance: Labor and IRS; Special instructions about recipients of disclosure: Two-fold notice requirements: one notice to be sent to plan participants and beneficiaries; and a slightly different notice to be sent to Labor, Treasury. and each employee organization representing participants in the plan; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(h) and 420; * 29 U.S.C. § 1021(e); * Minimum Cost Requirement Permitting the Transfer of Excess Assets of a Defined Benefit Pension Plan to a Retiree Health Account, 66 Fed. Reg. 32,897 (June 19, 2001), and (final rule); * DOL Tech Rel. 91-1; Triggering event: Plan sponsor decision to transfer excess pension assets to a retiree health benefits account. Name of nonroutine disclosure: Notice to interested parties of application for advanced determination regarding the qualifications of a plan under Internal Revenue Code; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans filing for 5300, 5307 or 6406 determination letters; Applicable laws, regulations, and agency guidance: * 26 C.F.R. §§ 1.7476-1(b), 1.7476-2(e)(1), and 601.201(o)(3)(xiv)- (xx); * Revenue procedures updated annually; Triggering event: Tax exempt status. Name of nonroutine disclosure: Notification of adverse benefit determination; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1133; * 29 C.F.R. § 2560.503-1(f); Triggering event: Claim for pension benefits denied. Name of nonroutine disclosure: Participant loan program disclosures; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1108(b)(1); * 26 U.S.C. § 4975(d)(1); * 29 C.F.R. § 2550.408b-1; Triggering event: Participant requests loan. Name of nonroutine disclosure: Plan documents (e.g., plan documents, bargaining agreements, trust documents, contracts); Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1024(b)(2) and (b)(4), and 1132(c)(1); Triggering event: Upon request. Name of nonroutine disclosure: Plan termination/distress termination: disclosure of plan termination information; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: In addition to participants, also to be sent to PBGC; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(c)(2)(D); * 29 C.F.R. § 4041.51; Triggering event: Termination (distress). Name of nonroutine disclosure: Plan termination/distress termination: notice of annuity information; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: In addition to participants, also to be sent to PBGC; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 4041.48(c); Triggering event: Termination (distress). Name of nonroutine disclosure: Plan termination/distress termination: notice of benefit distribution; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(c); * 29 C.F.R. § 4041.48(a); Triggering event: Termination (distress). Name of nonroutine disclosure: Plan terminations/distress termination: notice of intent to terminate (NOIT); Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(a)(2); * 29 C.F.R. § 4041.43; Triggering event: Termination (distress). Name of nonroutine disclosure: Plan terminations/standard termination: notice of annuity contract; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 4041.28(d); Triggering event: Termination (standard). Name of nonroutine disclosure: Plan terminations/standard termination: notice of annuity information; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. §§ 4041.23(b)(5) and 4041.27; Triggering event: Termination (standard). Name of nonroutine disclosure: Plan terminations/standard termination: notice of Intent to Terminate (NOIT); Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(a)(2); * 29 C.F.R. § 4041.23; Triggering event: Termination (standard). Name of nonroutine disclosure: Plan terminations/standard termination: notice of plan benefits (NOPB); Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 4041.24; Triggering event: Termination (standard). Name of nonroutine disclosure: Qualified joint and survivor annuity (QJSA) notice; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans subject to 26 U.S.C. § 412; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(a)(11) and 417(a)(3)(A); * 26 C.F.R. § 1.417(a)(3)-1; Triggering event: Eligibility for benefit payment. Name of nonroutine disclosure: Qualified pre-retirement survivor annuity (QPSA) notice; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: Only to be sent to married participants age 32-35; Plans required to provide disclosure: DB and DC plans subject to 29 U.S.C. § 412; Applicable laws, regulations, and agency guidance: * 26 C.F.R. §§ 401(a)(11)(A) and 417(a)(3)(B); * 26 C.F.R.§§ 1.401(a)-20 (Q&A 35) and 1.417(a)(3)-1; Triggering event: Married participants age 32-35. Name of nonroutine disclosure: Request for approval of retroactive plan amendment that would reduce accrued benefits; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to employee organizations, and IRS; Plans required to provide disclosure: DB plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 411(d)(6), 412(d)(2), and 4980F; * 29 U.S.C. § 1082(e); * Rev. Proc. 94-42; Triggering event: Change in plan structure. Name of nonroutine disclosure: Safe harbor 401(k) notice; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to Labor; Plans required to provide disclosure: DC safe harbor plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 401(k)(12)(D); * 26 C.F.R. §§ 1.401(k)-3(d) and 1.401(k)-3(f); Triggering event: Change in plan design (safe harbor). Name of nonroutine disclosure: Salary deferral election form; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans with cash or deferral arrangements (CODA); Applicable laws, regulations, and agency guidance: * 26 C.F.R. § 1.401(k)-1(a)(3); Triggering event: Enrollment. Name of nonroutine disclosure: Sarbanes-Oxley blackout notice; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1021(i); * 29 C.F.R. § 2520.101-3(b); Triggering event: Blackout period. Name of nonroutine disclosure: Separated participants with deferred vested benefits; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6057(e); * 29 U.S.C. § 1025(c); * 26 C.F.R. § 301.6057; Triggering event: Participants who are terminated and not paid out that must be reported on Form 8955-SSA. Name of nonroutine disclosure: Statement of accrued and nonforfeitable benefits; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1059; Triggering event: Upon request, no more than once a year, termination of service, or a one year break in service. Name of nonroutine disclosure: Summary of material modifications (SMM); Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: Labor, upon request; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1022 and 1024; * 29 C.F.R. § 2520.1-4b-3; Triggering event: Material modification to the plan. Source: GAO analysis of information provided by Labor, IRS, and PBGC. [A] Notice of right to defer distribution: the scheduled public hearing was canceled when no one requested to speak. 74 Fed. Reg. 7,021 (Oct. 9, 2008). [End of table] Name of nonroutine disclosure: Automatic rollover notice; Agency providing oversight and/or guidance: IRS and Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: Defined benefit (DB) and defined contribution) DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 401(a)(31)(B); * 29 C.F.R. § 2550.404a-2 (safe harbor for participant disclosures in connection with automatic rollover notice); Triggering event: Mandatory distribution. Name of nonroutine disclosure: Distribution eligible for rollover treatment notice (402(f)); Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 402(c) and (f); * 26 C.F.R. §§ 1.401(a)-21, 1.402(f)-1 and 1.408-6; * IRS Notices 2009-68 and 2010-84; Triggering event: Eligible rollover distribution. Name of nonroutine disclosure: Distributions from pensions, annuities, retirement or profit sharing plans, IRAs, insurance contracts, etc; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6047(d); * 26 C.F.R. § 31.3405(c)-1; Triggering event: Participant takes distribution. Name of nonroutine disclosure: Election to remain under prior vesting schedule; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 411(d)(10); Triggering event: Change in vesting schedule. Name of nonroutine disclosure: Employer stock diversification notice; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans that hold publicly- traded employer securities other than "freestanding" ESOPs with no 401(k) or 401(m) contributions; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 401(a)(35); * 29 U.S.C. §§ 1021(m) and 1054 (j); * IRS Notice 2006-107; Triggering event: Diversification eligibility. Name of nonroutine disclosure: ERISA 404(c) disclosure for fiduciary relief; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans. (Disclosure is sent by fiduciaries of participant-directed individual account plans to obtain fiduciary relief related to participants' investment choices); Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1104(c); * 29 C.F.R. §§ 2550.404c-1 and 2550.404a-5; Triggering event: Specific plan design. Name of nonroutine disclosure: Extension of amortization period; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to PBGC, contributing employers, and unions; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 431(d); * 29 U.S.C. § 1301(a)(21); Triggering event: Application for extension. Name of nonroutine disclosure: Investments: prospectuses; Agency providing oversight and/or guidance: SEC, FINRA, and Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans claiming 404(c) protection or allowing participant investment in employer stock; Applicable laws, regulations, and agency guidance: * 15 U.S.C. §§ 77j and 80a-24; * 29 C.F.R. § 2550.404a-5(d); Triggering event: Upon request. Name of nonroutine disclosure: Loans: amortization schedule; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 72(p); Triggering event: Participant requests loan. Name of nonroutine disclosure: Multiemployer plan information; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: In addition to participants, also to be sent to employee representative or employer obligated to contribute to the plan; Plans required to provide disclosure: DB Multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1021(k); * 29 C.F.R. § 2520.101-6; Triggering event: Upon request. Name of nonroutine disclosure: Notice of endangered or critical status plans; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to bargaining parties, PBGC, and Labor; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 432(b)(3); * 29 U.S.C. § 1085(b)(3); Triggering event: Endangered or critical status in plan year. Name of nonroutine disclosure: Notice of failure to meet minimum funding standards; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: In addition to participants, also to be sent to IRS and PBGC; Plans required to provide disclosure: DB single-employer plans and DC money purchase plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1021(d) and 1132(c)(3); Triggering event: Underfunding (failure to make missed payment within correction period). Name of nonroutine disclosure: Notice of intent to terminate the plan; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 C.F.R. § 1.7476-2; * Revenue procedures updated annually; Triggering event: Termination. Name of nonroutine disclosure: Notice of mass withdrawal to employers; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R §§ 4219.11(b)(1), 4219.16(a) and 4219.18(d); Triggering event: Change in employer (withdrawal of all or substantially all employers). Name of nonroutine disclosure: Notice of participant consent to the distribution; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 411(a)(11); * 26 C.F.R. §§ 1.401(a)-20 and 1.411(a)-11(c); Triggering event: Distribution amount exceeds mandatory cashout limit. Name of nonroutine disclosure: Notice of plan termination; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC individual account plans wanting safe harbor relief; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1104(a); * 29 C.F.R. § 2550.404a-3; Triggering event: Termination. Name of nonroutine disclosure: Notice of qualified change in investment options (QCIO); Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: In addition to participants, also to be sent to IRS and PBGC; Plans required to provide disclosure: DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1104(c)(4); Triggering event: Change in plan structure. Name of nonroutine disclosure: Notice of qualified domestic relations order (QDRO) procedures; Agency providing oversight and/or guidance: IRS and Labor; Special instructions about recipients of disclosure: Only to be sent to participants, beneficiaries, and alternate payees named in a domestic relations order; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 414(p)(6); * 29 U.S.C. § 1056(d)(3)(G) (requires a plan to establish procedures in writing); Triggering event: Marital dissolutions or actions for child or family support. Name of nonroutine disclosure: Notice of reallocation liability following mass withdrawal; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: Rather than to participants, to be sent to employers; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 4219.16(c); Triggering event: Employer mass withdrawal. Name of nonroutine disclosure: Notice of redetermination liability following mass withdrawal; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: Rather than to participants, to be sent to employers liable for redetermination on liability; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. §§ 4219.16(b) and 4219.18(e); Triggering event: Employer mass withdrawal. Name of nonroutine disclosure: Notice of Reduction in Adjustable Benefits; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to unions and contributing employers; Plans required to provide disclosure: DB multiemployer plans that are critical status; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 432(e)(8)(C); Triggering event: Critical status. Name of nonroutine disclosure: Notice of reorganization; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: Rather than to participants, to be sent to employers and employee organizations; Plans required to provide disclosure: DB multiemployer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1422; Triggering event: Change in plan (Reorganization). Name of nonroutine disclosure: Notice of request for a waiver from minimum funding requirement; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB target benefit or money purchase plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 412(c)(6); * 29 U.S.C. § 1082(c)(6); Triggering event: Underfunding. Name of nonroutine disclosure: Notice of restriction on benefit accruals and distributions; Agency providing oversight and/or guidance: IRS and Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB Single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1021(j) and 1132(c)(4); Triggering event: Underfunding. Name of nonroutine disclosure: Notice of right to defer distribution; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 411(a)(11); * Notice To Participants of Consequences of Failing to Defer Receipt of Qualified Retirement Plan Distributions; Expansion of Applicable Election Period and Period for Notices, 73 Fed. Reg. 59,575 (Oct. 9, 2008) (proposed rule and notice of public hearing)a; Triggering event: Distribution eligibility. Name of nonroutine disclosure: Notice of right to elect not to have federal income tax withheld from distributions; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 3405(e)(10); Triggering event: Distribution eligibility. Name of nonroutine disclosure: Notice of safe harbor discontinuance; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC safe harbor plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 401(k)(12) and(13); * 26 C.F.R. § 1.401(k)-3(g); Triggering event: Discontinuance of safe harbor 401(k) contributions. Name of nonroutine disclosure: Notice of significant reduction in the rate of future benefit accruals; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to contributing employer and certain employee organizations; Plans required to provide disclosure: DB and DC plans subject to I.R.C § 412; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 4980F(e); * 29 U.S.C. § 1054(h); * 26 C.F.R. § 54.4980F-1; Triggering event: Amendment of significant reduction in future benefit accrual. Name of nonroutine disclosure: Notice of suspension of benefit upon reemployment of retiree; Agency providing oversight and/or guidance: IRS and Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 411(a)(3)(B); * 29 U.S.C. § 1053(a)(3)(B); * 29 C.F.R. § 2530.203-3(b)(4); Triggering event: Reemployed after retirement. Name of nonroutine disclosure: Notice of transfer of excess pension assets to retiree health benefit account; Agency providing oversight and/or guidance: Labor and IRS; Special instructions about recipients of disclosure: Two-fold notice requirements: one notice to be sent to plan participants and beneficiaries; and a slightly different notice to be sent to Labor, Treasury. and each employee organization representing participants in the plan; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(h) and 420; * 29 U.S.C. § 1021(e); * Minimum Cost Requirement Permitting the Transfer of Excess Assets of a Defined Benefit Pension Plan to a Retiree Health Account, 66 Fed. Reg. 32,897 (June 19, 2001), and (final rule); * DOL Tech Rel. 91-1; Triggering event: Plan sponsor decision to transfer excess pension assets to a retiree health benefits account. Name of nonroutine disclosure: Notice to interested parties of application for advanced determination regarding the qualifications of a plan under Internal Revenue Code; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans filing for 5300, 5307 or 6406 determination letters; Applicable laws, regulations, and agency guidance: * 26 C.F.R. §§ 1.7476-1(b), 1.7476-2(e)(1), and 601.201(o)(3)(xiv)- (xx); * Revenue procedures updated annually; Triggering event: Tax exempt status. Name of nonroutine disclosure: Notification of adverse benefit determination; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1133; * 29 C.F.R. § 2560.503-1(f); Triggering event: Claim for pension benefits denied. Name of nonroutine disclosure: Participant loan program disclosures; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1108(b)(1); * 26 U.S.C. § 4975(d)(1); * 29 C.F.R. § 2550.408b-1; Triggering event: Participant requests loan. Name of nonroutine disclosure: Plan documents (e.g., plan documents, bargaining agreements, trust documents, contracts); Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1024(b)(2) and (b)(4), and 1132(c)(1); Triggering event: Upon request. Name of nonroutine disclosure: Plan termination/distress termination: disclosure of plan termination information; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: In addition to participants, also to be sent to PBGC; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(c)(2)(D); * 29 C.F.R. § 4041.51; Triggering event: Termination (distress). Name of nonroutine disclosure: Plan termination/distress termination: notice of annuity information; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: In addition to participants, also to be sent to PBGC; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 4041.48(c); Triggering event: Termination (distress). Name of nonroutine disclosure: Plan termination/distress termination: notice of benefit distribution; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(c); * 29 C.F.R. § 4041.48(a); Triggering event: Termination (distress). Name of nonroutine disclosure: Plan terminations/distress termination: notice of intent to terminate (NOIT); Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(a)(2); * 29 C.F.R. § 4041.43; Triggering event: Termination (distress). Name of nonroutine disclosure: Plan terminations/standard termination: notice of annuity contract; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 4041.28(d); Triggering event: Termination (standard). Name of nonroutine disclosure: Plan terminations/standard termination: notice of annuity information; Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. §§ 4041.23(b)(5) and 4041.27; Triggering event: Termination (standard). Name of nonroutine disclosure: Plan terminations/standard termination: notice of Intent to Terminate (NOIT); Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1341(a)(2); * 29 C.F.R. § 4041.23; Triggering event: Termination (standard). Name of nonroutine disclosure: Plan terminations/standard termination: notice of plan benefits (NOPB); Agency providing oversight and/or guidance: PBGC; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB single-employer plans; Applicable laws, regulations, and agency guidance: * 29 C.F.R. § 4041.24; Triggering event: Termination (standard). Name of nonroutine disclosure: Qualified joint and survivor annuity (QJSA) notice; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans subject to 26 U.S.C. § 412; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 401(a)(11) and 417(a)(3)(A); * 26 C.F.R. § 1.417(a)(3)-1; Triggering event: Eligibility for benefit payment. Name of nonroutine disclosure: Qualified pre-retirement survivor annuity (QPSA) notice; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: Only to be sent to married participants age 32-35; Plans required to provide disclosure: DB and DC plans subject to 29 U.S.C. § 412; Applicable laws, regulations, and agency guidance: * 26 C.F.R. §§ 401(a)(11)(A) and 417(a)(3)(B); * 26 C.F.R.§§ 1.401(a)-20 (Q&A 35) and 1.417(a)(3)-1; Triggering event: Married participants age 32-35. Name of nonroutine disclosure: Request for approval of retroactive plan amendment that would reduce accrued benefits; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to employee organizations, and IRS; Plans required to provide disclosure: DB plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. §§ 411(d)(6), 412(d)(2), and 4980F; * 29 U.S.C. § 1082(e); * Rev. Proc. 94-42; Triggering event: Change in plan structure. Name of nonroutine disclosure: Safe harbor 401(k) notice; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: In addition to participants, also to be sent to Labor; Plans required to provide disclosure: DC safe harbor plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 401(k)(12)(D); * 26 C.F.R. §§ 1.401(k)-3(d) and 1.401(k)-3(f); Triggering event: Change in plan design (safe harbor). Name of nonroutine disclosure: Salary deferral election form; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans with cash or deferral arrangements (CODA); Applicable laws, regulations, and agency guidance: * 26 C.F.R. § 1.401(k)-1(a)(3); Triggering event: Enrollment. Name of nonroutine disclosure: Sarbanes-Oxley blackout notice; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1021(i); * 29 C.F.R. § 2520.101-3(b); Triggering event: Blackout period. Name of nonroutine disclosure: Separated participants with deferred vested benefits; Agency providing oversight and/or guidance: IRS; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 26 U.S.C. § 6057(e); * 29 U.S.C. § 1025(c); * 26 C.F.R. § 301.6057; Triggering event: Participants who are terminated and not paid out that must be reported on Form 8955-SSA. Name of nonroutine disclosure: Statement of accrued and nonforfeitable benefits; Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: [Empty]; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. § 1059; Triggering event: Upon request, no more than once a year, termination of service, or a one year break in service. Name of nonroutine disclosure: Summary of material modifications (SMM); Agency providing oversight and/or guidance: Labor; Special instructions about recipients of disclosure: Labor, upon request; Plans required to provide disclosure: DB and DC plans; Applicable laws, regulations, and agency guidance: * 29 U.S.C. §§ 1022 and 1024; * 29 C.F.R. § 2520.1-4b-3; Triggering event: Material modification to the plan. Source: GAO analysis of information provided by Labor, IRS, and PBGC. [A] Notice of right to defer distribution: the scheduled public hearing was canceled when no one requested to speak. 74 Fed. Reg. 7,021 (Oct. 9, 2008). [End of table] [End of section] Appendix III: Disclosures with Readability Provisions under ERISA or IRC: Disclosure: 1. Qualified automatic contribution arrangement; Standard: "...is written in a manner calculated to be understood by the average employee to whom the arrangement applies..."; Citation: 26 U.S.C. § 401(k)(13)(E)(i)(II). Disclosure: 2. Eligible automatic contribution arrangement; Standard: "...written in a manner calculated to be understood by the average employee to whom the arrangement applies"; Citation: 26 U.S.C. § 414(w)(4)(A)(ii). Disclosure: 3. Notice of reduction in adjustable benefits; Standard: "...shall be written in a manner so as to be understood by the average plan participant..."; Citation: 26 U.S.C. § 432(e)(8)(C)(iii)(II); 29 U.S.C. § 1085(e)(8)(C)(iii)(II). Disclosure: 4. Notice of availability of investment advice; Standard: "...calculated to be understood by the average plan participant..."; Citation: 26 U.S.C. 4975(f)(8)(H)(i); 29 U.S.C. 1108(g)(8)(A). Disclosure: 5. Notice of significant reduction in the rate of future benefit accruals; Standard: "...written in a manner calculated to be understood by the average plan participant..."; Citation: 26 U.S.C. § 4980F(e)(2); 29 U.S.C. § 1054(h)(2). Disclosure: 6. Annual funding notice; Standard: "...shall be written in a manner so as to be understood by the average plan participant"; Citation: 29 U.S.C. § 1021(f)(4)(B). Disclosure: 7. Sarbanes-Oxley blackout notice; Standard: "...shall be written in a manner calculated to be understood by the average plan participant..."; Citation: 29 U.S.C. § 1021(i). Disclosure: 8. Employer stock diversification notice; Standard: "The notice required by this subsection shall be written in a manner calculated to be understood by the average plan participant..."; Citation: 29 U.S.C. § 1021(m). Disclosure: 9. Summary plan description; Standard: "...shall be written in a manner calculated to be understood by the average plan participant"; Citation: 29 U.S.C. §§ 1022(a). Disclosure: 10. Periodic pension benefit statement; Standard: "...shall be written in a manner calculated to be understood by the average plan participant..."; Citation: 29 U.S.C. § 1025(a)(2)(A)(iii); 29 U.S.C. § 1025(a)(2)(B)(ii)(II). Disclosure: 11. Notice for fiduciary relief for investments in qualified default investment alternatives (QDIA); Standard: "...is written in a manner calculated to be understood by the average employee eligible to participate"; Citation: 29 U.S.C. § 1104(c)(5)(B)(ii). Source: Federal laws, as cited above. [End of table] Appendix IV: Comments from the Department of Labor: U.S. Department of Labor: Assistant Secretary for Employee Benefits Security Administration: Washington, D.C. 20210: October 31, 2013: Charles A. Jeszeck Director, Education, Workforce, and Income Security: United States Government Accountability Office: Washington, DC 20548: Dear Mr. Jeszeck: Thank you for the opportunity to review the Government Accountability Office's (GAO) draft report entitled "Required Reports and Disclosures Could Be Clarified and Improved"(GAO-14-92) The recommendations in your draft report focus on disclosure requirements under the Employee Retirement Income Security Act (ERISA) administered by the Department of Labor applicable to private sector pension plans as well as separate reporting and disclosure requirements under the authority of the Department of the Treasury/Internal Revenue Service and the Pension Benefit Guaranty Corporation (collectively "Agencies"). Your draft report correctly notes that the statutory disclosure requirements have increased over time, both in terms of the number of different disclosures required and in the complexity of the disclosures themselves. The Agencies have worked to coordinate their respective disclosure requirements, but, as your draft report notes, the timing and substance of pension plan disclosure obligations vary depending upon type and size of plan, and the Agencies may not have the legal authority to develop a single disclosure method to accommodate all of the disclosures necessary to keep participants and beneficiaries fairly apprised of their rights and obligations under their plans and federal law. With that as background, we have the following comments regarding the draft report's recommendations directed to the Labor Department, the Treasury Department/IRS and the PBGC: Specifically, your draft report recommends that to ease the burden on plan sponsors, enhance compliance, and help ensure that disclosures to participants are written in a manner that can be understood by the average participant, Labor, IRS, and PBGC should work together to: 1) Create a comprehensive and regularly updated online tool that would enable plan sponsors to search for the reports and disclosures they are required to submit based on a plan's type, design, and circumstances. 2) Define criteria for complying with the readability provisions in ERISA and the IRC, and apply the criteria to agency-generated model notices as well as those developed by plan sponsors. As part of these criteria, consider requiring clear, simple, brief highlights be included at the beginning of disclosures, in a manner that adheres to federal plain language guidelines. We will consult with our colleagues at the Treasury Department/IRS and PBGC regarding the draft Report's recommendation that the three Agencies create one unified online tool for plan administrators to search for the reports and disclosures they are required to submit based on a plan's type, design, and circumstances. We note that the Agencies already have a substantial amount of compliance assistance materials available to the public (including on our websites) and have other compliance assistance resources available to pension plan sponsors and other plan fiduciaries who have questions about their reporting and disclosure obligations We also will need to examine whether a unified tri-agency online tool of the type you describe would be valuable for sponsors of large pension plans who have personnel specifically dedicated to administering their pension plans, and could actually be confusing to some plan sponsors, especially small employers, who may not be subject to the range of reporting and disclosure requirements that apply to large plans or plans with more complex designs. With respect to the second recommendation, the Department agrees that a major purpose of ERISA was to remedy" ... the lack of employee information and adequate safeguards concerning ... " the operation of employee benefit plans by requiring that" ... disclosure be made ... with respect to the establishment, operation, and administration of such plans ... " ERISA §2(a), 29 U.S.C. §1001(a). Accordingly, timely and effective disclosure is a priority for the Department of Labor. Because the subject matter of required disclosures can be complicated, the Agencies have increased their use of models and forms to provide plan sponsors and participants and beneficiaries with clear and understandable formats for compliance with statutory requirements. Plan sponsors have expressed concern regarding liabilities that may result from ambiguities that arise when complex information is summarized or presented using "plain English" criteria. Thus, we will explore the utility of available readability standards. We will also continue to use modern communication techniques (such as focus group testing) to improve the effectiveness of our model notices and other standardized disclosures. The draft report's third recommendation is directed just to the Department of Labor. Specifically, it recommends that, to better ensure that plan participants have access to information about their rights, as currently in force under their plans, Labor should direct plan sponsors to post to any intranet website maintained by the employer, as soon as determined feasible by Labor, a copy of the most current summary plan description (SPD) and any summary of material modifications issued subsequent to that SPD. ERISA as amended contains detailed requirements designed to ensure that participants and beneficiaries receive and have ongoing access to information about their rights and benefits under pension plans, and ongoing access to SPDs and SMMs, including updated SPDs. In 2011, EBSA published a Request for Information (RFI) regarding electronic disclosure by employee benefit plans to explore whether, and possibly how, to expand or modify disclosure standards taking into account current technology, best practices and the need to protect the rights and interests of participants and beneficiaries. From comments received, we understand many plan sponsors, especially those that have intranet websites, already post plan related information for employees. Thus, rather than addressing GAO's recommendation as a stand-alone item, our ongoing process in connection with this RFI may be a better vehicle for considering the benefits of such an intranet posting requirement and the potential additional administrative burdens and costs on employee benefit plans and their sponsors. Relatedly, we will also need to examine whether the Department has the authority to impose such a requirement administratively, or whether it would require statutory amendment. We point out that a similar requirement concerning posting of actuarial information on employers' intranet websites was added to ERISA by the Pension Protection Act of2006. See ERISA section 104(b)(5). EBSA is committed to protecting the employer-sponsored benefits of American workers, retirees, and their families. We appreciate having had the opportunity to review and comment on the draft report. Please do not hesitate to contact us if you have questions concerning this response or if we can be of further assistance. Sincerely, Signed by: Phyllis C. Borzi: Assistant Secretary: [End of section] Appendix V: Comments from the Department of Treasury/Internal Revenue Service: Department of The Treasury: Assistant Secretary: 441 G Street, NW, Room 5968: Washington, DC: November 13, 2013: Charles A. Jeszeck Director, Education, Workforce, and Income Security: United States Government Accountability Office: Washington, DC 20548: Dear Mr. Jeszeck: Thank you for the opportunity to review the draft report of the Government Accountability Office entitled "Required Reports and Disclosures Could Be Clarified and Improved" (GAO-14-92). The recommendations in the draft report focus on reporting and disclosure requirements applicable to private-sector retirement plans pursuant to the Internal Revenue Code and the Employee Retirement Income Security Act. The Department of the Treasury, the Internal Revenue Service, the Department of Labor, and the Pension Benefit Guaranty Corporation (collectively, the Agencies) have regulatory jurisdiction over these requirements. The draft report correctly notes that statutory disclosure and reporting requirements have increased over time, both in terms of the number of different disclosures and reports required and the complexity of the disclosures and reports. In addition, the timing and nature of pension plan disclosure and reporting obligations vary depending upon the type and size of plan. While the Agencies have worked to coordinate their respective disclosure and reporting requirements, it may not be possible to develop a single disclosure and reporting method to accommodate all of the disclosures and reports necessary to fairly apprise participants and beneficiaries of their rights and obligations under their plans and federally and to keep the Agencies apprised of the compliance status of plans. With that as background, we have several comments regarding the draft report's recommendations directed to the Agencies. The draft report recommends that, to ease burdens on plan sponsors, enhance compliance, and help ensure that disclosures to participants are written in a manner that can be understood by the average participant, the Agencies work together to: 1. Create a comprehensive and regularly updated online tool that would enable plan sponsors to search for the reports and disclosures they are required to submit based on a plan's type and circumstances. 2. Define criteria for complying with the readability provisions of ERISA and the Code, and apply the criteria to agency-generated model notices as well as those developed by plan sponsors. As part of these criteria, consider requiring clear, simple, brief. highlights to be included at the beginning of disclosures, in a manner that adheres to federal plain language guidelines. The Department of the Treasury and the IRS will consult with our colleagues at the Department of Labor and the PBOC regarding the draft report's recommendation that the Agencies create a unified online tool for plan administrators to search for the reports and disclosures they are required to submit based on a plan's type, design, and circumstances. The Agencies already have a substantial amount of compliance assistance materials available to the public (including on our websites). These materials are often targeted at particular kinds of plans or employers. The Agencies also have other compliance assistance resources available to pension plan sponsors and other plan fiduciaries that have questions about their reporting and disclosure obligations. In assessing the desirability and feasibility of implementing this recommendation, the Agencies will need to examine whether a unified tri-agency online tool of the type the draft report describes would be valuable for sponsors of large pension plans that have personnel specifically dedicated to administering the plans, and whether a unified tool could be confusing to some plan sponsors, especially small employers, that may not be subject to the wider range of reporting and disclosure requirements applicable to plans that are larger and more complex. With respect to the second recommendation, the Department of the Treasury and the IRS agree that an important purpose of ERISA and Code regulation of retirement plans is to provide for informative disclosure to participants and beneficiaries regarding the establishment, operation, and administration of plans. In recognition of this purpose, many regulations impose a requirement that disclosures be written in a manner calculated to be understood by the average participant. Also, because the subject matter of required disclosures is often technical and complex, models and forms are often used to provide plan sponsors, participants, and beneficiaries with clear and understandable formats for compliance with statutory requirements. Pursuant to the Plain Writing Act of 2010, the Department of the Treasury and the IRS are also committed to writing new documents in plain language, using the Federal Plain Language Guidelines. Although the Plain Writing Act is directed at communications from the federal government to the public, rather than communications and disclosures from private entities (such as plans, plan sponsors, and plan administrators) to other private entities (such as plan participants and beneficiaries), we are interested in the draft report's suggestion to consider using the Guidelines in a way not contemplated by the Act. Certain of the Guidelines may not be particularly applicable to private party disclosures from plan sponsors and administrators in the voluntary private retirement system. For example, disclosures may be designed to provide mandated information rather than to suggest a particular course of action for a recipient in response to the information; it may not be feasible to address each type of disclosure recipient separately and it may not be feasible for private entities to engage in formal testing of draft disclosures, such as through focus groups. However, certain of the Guidelines, such as advice on using active voice and omitting unnecessary words, would he helpful in drafting communications both for private-sector and federal government writers. While it may not be desirable or feasible to impose a legal requirement that private- sector authors of disclosures follow the Guidelines, it may be useful to direct private-sector writers to the Guidelines as helpful general advice for writing understandable disclosures, Also, a decision about whether to impose readability standards for required disclosures would need to take into account plan sponsor concerns regarding liability that may result from ambiguities that arise when complex information is summarized or presented in terms that are over-simplified. Although not the subject of a recommendation directed at the Department of the Treasury and the IRS, the draft report discusses at some length the Form 8955-SSA report (and related disclosure requirements) under Code section 6057 with respect to benefits of deferred vested participants, and makes a legislative recommendation on that topic. The draft report describes various benefits community concerns regarding the Form 8955-SSA. The concerns appear to boil down to the problem of "false positives" (i.e., letters from the Social Security Administration to participants at commencement of their social security benefits that describe deferred vested benefits payable under employer-sponsored retirement plans that already have been paid). The Department of the Treasury and the IRS have recently issued proposed regulations that would require the Form 8955-SSA to be tiled electronically (to the extent permitted under current law). This change, when finalized, should result in more accurate data regarding deferred vested participants. for example, by reducing the potential for scanning and key-data entry errors. In addition, the Department of the Treasury and the IRS are currently working on a project listed on our 2013-2014 priority guidance plan regarding reporting and disclosure under Code section 6057. We are considering regulatory changes to help address the false positives problem, and we intend to take into account the draft GAO report's findings in issuing any guidance. The Department of the Treasury and the IRS are committed to expanding retirement coverage and protecting the retirement benefits of workers, retirees. and their families, We appreciate having had the opportunity to review and comment on the draft report. Please do not hesitate to contact us if you have questions concerning this response or if we can be of further assistance. Sincerely, Signed by: J. Mark Iwry: Senior Advisor to the Secretary and Deputy Assistant Secretary (Retirement and Health Policy): [End of section] Appendix VI: Comments from the Pension Benefits Guaranty Corporation: PBGC: Pension Benefit Guaranty Corporation: Office of The Director: 1200 K Street, N.W. Washington, D.C. 20005-4026: November 6, 2013: Charles A. Jeszeck: Director, Education, Workforce, and Income Security: United States Government Accountability Office: Washington, DC 20548: Dear Mr. Jeszeck: This is in response to your request for comments on GAO's recent draft report on the reports and disclosures required of private pension plans. We generally agree with your findings and will continue to work together with our colleagues at Labor and Treasury/IRS in exploring our options to address the issues your report raises. To get to the root cause of the issues raised, however, GAO should consider the possibility of giving the ERISA agencies the discretion to develop better notices. This would enable the agencies to implement the results of our cooperative efforts much more effectively. Unlike some areas of law, pension legislation is both complex and highly prescriptive. The very professional staffs of the ERISA agencies often do not believe they have discretion to make improvements -- even to correct obvious errors -- and in some cases, not even the discretion to coordinate their communication to participants and sponsors. Our cooperative efforts in translating the technical, legal jargon into plain English could be far more effective if the agencies had more administrative discretion in designing the notices. Absent that - even on areas where the agencies agree - agencies will be compelled to retain separate, complicated, and frequently unintelligible language. For example, the lengthy and complex statutory content requirements for the Title I Annual Funding Notice place significant limitations on the notice's readability. Given additional administrative discretion, this Administration can readily design a notice that gives participants information they can understand and use, without unnecessarily burdening plans and sponsors. The burden of reporting and disclosure requirements has certainly contributed to the loss of more than 130,000 defined benefit plans since the passage of ERISA. Working together within the pension community, the ERISA agencies are well-positioned to develop more cost- effective and understandable reports and disclosures to carry out our missions. Again, thank you for your important report on a difficult topic. PBGC will provide technical comments under separate cover. Sincerely yours, Signed by: Josh: Gotbaum: [End of section] Appendix VII: Comments from the Social Security Administration: Social Security: Office of the Commissioner: Social Security Administration: Baltimore, MD 21235-0001: October 31, 2013: Mr. Charles A. Jeszeck: Director, Education, Workforce, and Income Security Issues: United States Government Accountability Office: 441 G Street, NW: Washington, DC 20548: Dear Mr. Jeszeck: Thank you for the opportunity to review the draft report, "Private Pensions: Required Reports and Disclosures Could Be Clarified and Improved" (GAO-14-92). We agree with the report. If you have any questions, please contact me at (410) 966-9014. Your staff may contact Gary S. Hatcher, Senior Advisor for Records Management and Audit Liaison Staff, at (410) 965-0680. Sincerely, Signed by: Katherine Thornton: Deputy Chief of Staff: [End of section] Appendix VIII: GAO Contact and Staff Acknowledgments: GAO Contact: Charles A. Jeszeck, Director, (202) 512-7215 or jeszeckc@gao.gov. Staff Acknowledgments: In addition to the individual above, Margie K. Shields (Assistant Director), Margaret Weber (Analyst-in-Charge), and Ted Leslie made significant contributions to this report. James Bennett, Ted Burik, Holly Dye, Sara Edmondson, Nisha Hazra, Kathy Leslie, Sheila McCoy, Jonathan McMurray, Christopher Morehouse, and Craig Winslow also contributed to this report. [End of section] Related GAO Products: Private Pensions: Revised Electronic Disclosure Rules Could Clarify Use and Better Protect Participant Choice: [hyperlink, http://www.gao.gov/products/GAO-13-594]. Washington, D.C.: September 13, 2013. Federal Agencies Should Collect Data and Coordinate Oversight of Multiple Employer Plans. [hyperlink, http://www.gao.gov/products/GAO-12-665]. Washington, D.C.: September 13, 2012. Defined Contribution Plans: Approaches in Other Countries Offer Beneficial Strategies in Several Areas [hyperlink, http://www.gao.gov/products/GAO-12-328]. Washington, D.C.: March 22, 2012. Financial Literacy: Strengthening Partnerships in Challenging Times. [hyperlink, http://www.gao.gov/products/GAO-12-299SP]. Washington, D.C.: February 9, 2012). Private Pensions: Additional Changes Could Improve Employee Benefit Plan Financial Reporting. [hyperlink, http://www.gao.gov/products/GAO-10-54]. Washington, D.C.: November 5, 2009. Retirement Savings: Automatic Enrollment Shows Promise for Some Workers, but Proposals to Broaden Retirement Savings for Other Workers Could Face Challenges. [hyperlink, http://www.gao.gov/products/GAO-10-31]. Washington, D.C.: October 23, 2009. Private Pensions: Changes Needed to Provide 401(k) Plan Participants and the Department of Labor Better Information on Fees. [hyperlink, http://www.gao.gov/products/GAO-07-21]. Washington, D.C.: November 16, 2006. Social Security Statements: Social Security Administration Should Better Evaluate Whether Workers Understand Their Statements. [hyperlink, http://www.gao.gov/products/GAO-05-192]. Washington, D.C.: April 1, 2005. Private Pensions: Government Actions Could Improve the Timeliness and Content of Form 5500 Pension Information. [hyperlink, http://www.gao.gov/products/GAO-05-491]. Washington, D.C.: June 3, 2005. Private Pensions: Timely and Accurate Information Is Needed to Identify and Track Frozen Defined Benefit Plans. [hyperlink, http://www.gao.gov/products/GAO-04-200R]. Washington, D.C.: December 17, 2003. [End of section] Footnotes: [1] Pub. L. No. 93-406, 88 Stat. 829 (codified as amended at 26 U.S.C. §§ 401-436 and 4971-4982 and 29 U.S.C. §§ 1001-1453). [2] Plan sponsors are generally responsible for ensuring that their plans comply with all legal requirements. They may meet such requirements themselves or employ or contract with third parties to meet them. For ease of reference, throughout this report, we use the term "plan sponsor" broadly to include plan administrators, fiduciaries, or other service providers that may provide reports and disclosures on behalf of a plan sponsor. [3] Throughout this report, we use the term "reports" to refer to the information that plan sponsors are required to provide to federal agencies and the term "disclosures" to refer to the information sponsors are required to provide to participants (including beneficiaries and alternate payees). However, the use of terms regarding reports and disclosures can be confusing. Some reports to agencies include "disclosure" or "notice" in their titles, while some disclosures to participants include "report" or "notice" in their titles. We used those titles when discussing specific reports and disclosures. We also included certain content sent by multiemployer plan sponsors to employers with covered workers as "disclosures." [4] Model notices are templates created by Labor, PBGC, or IRS for plan sponsors to follow when writing all or a portion of a disclosure. [5] We assessed the reliability of this call data as well as data from federal agencies on the number of reports they received from plan sponsors in the most recent data year available. We found the data reliable for the purposes of this report. [6] Pub. L. No. 109-280, 120 Stat. 780. [7] Another category of plans is multiple employer plans. As with multiemployer plans, multiple employer plans cover employees of more than one employer and can be either DB or DC plans. They differ from multiemployer plans in that no collective bargaining agreements are involved. GAO, Private Sector Pensions: Federal Agencies Should Collect Data and Coordinate Oversight of Multiple Employer Plans, [hyperlink, http://www.gao.gov/products/GAO-12-665] (Washington D.C.: Sept. 13, 2012). [8] Certain reports and disclosures define large plans as those with 500 or more participants. [9] Labor has the statutory authority to bring legal action against plan fiduciaries that do not comply with ERISA requirements. For example, Labor is authorized to assess civil penalties not to exceed $1,000 per day for violations of certain ERISA disclosure requirements. 29 U.S.C. § 1132(c)(4). On January 2, 2009, Labor published final regulations on civil penalties under this authority. Civil Penalties Under ERISA Section 502(c)(4), 74 Fed. Reg. 17. [10] 26 U.S.C. §§ 162(a)(1) and 404(a). [11] PBGC insured about 25,500 DB plans protecting some 43 million workers and retirees in 2012. PBGC covers most DB plans, but not all. DB plans not covered by PBGC include plans for professional service employees (such as doctors and lawyers) with fewer than 26 employees, church plans, and public plans provided to federal, state, and local government workers. 29 U.S.C. § 1341. [12] In addition, publicly-traded companies must include in their annual financial statements, also filed with the SEC, financial information on their pension plans just as they do on other company financial matters. With respect to annual reports, the plan sponsor is treated essentially as any other such offerer of stock, and with respect to financial statements, plan information is included basically to present a more complete picture of a company's financial situation. Since, for the most part, companies can meet SEC pension plan reporting requirements by simply providing copies of their plan's financial statements, we did not include these SEC reporting requirements in the scope of this report. [13] Pub. L. No. 104-13, sec. 2, § 3504(c)(1),109 Stat. 163, 167. [14] While some of the requirements have been created directly by statute, others have been created by the three agencies in implementing the law. [15] Pub. L. No. 107-204, § 306(b), 116 Stat. 745, 780-83 (codified at 29 U.S.C. § 1021(i)). The act amended ERISA to add a new requirement that individual account pension plans provide notice to participants and beneficiaries in advance of periods during which the ability of participants or beneficiaries to direct or diversify assets credited to their accounts, to obtain loans from the plan or to obtain distributions from the plan will be temporarily suspended, limited or restricted. Enron was a large energy company that was plagued by financial fraud and insider trading and ultimately went bankrupt. Before the bankruptcy, when the value of Enron stock was plummeting, its rank and file DC plan participants were not permitted to sell their Enron shares and, therefore, suffered greater losses than they may have otherwise. H.R. Rep. 107-414, at 18 (2002). [16] §§ 501-509, 120 Stat. 936-952. [17] Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans, 75 Fed. Reg. 64,910 (Oct 20, 2010); Reasonable Contract of Arrangement Under Section 408(b)(2)--Fee Disclosure, 75 Fed. Reg. 41,600 (July 16, 2010) and Requirements for Fee Disclosure to Plan Fiduciaries and Participants--Applicability Dates, 76 Fed. Reg. 42,539 (July 19, 2011). [18] 29 U.S.C. § 1021(a) and (b). Certain plans, such as SIMPLE individual retirement accounts (IRA) are not subject to Form 5500 requirements. The Form 5500 includes 9 schedules and additional attachments that are required depending on the plan's characteristics and circumstances. The schedules and attachments are listed separately in our report. GAO is conducting a related study of the Form 5500 report anticipated to be released in spring, 2014. [19] Schedule I is not required of plans filing the 5500-SF or 5500 EZ. In plan year 2011, 91,377 plans submitted a schedule H and 111,069 plans submitted a schedule I with additional financial information. [20] Schedule A is only required of plans with benefits provided by an insurance company. In plan year 2011, 120,263 plans submitted at least one schedule A to report benefits provided by an insurance company. [21] In plan year 2011, plan sponsors submitted fewer than 900 filings of schedule G to report loans or fixed income obligations in default or classified as uncollectible. [22] ERISA agencies collect data on the volume of certain reports they receive but are unable to track similar information on disclosures. [23] 29 U.S.C. § 1024(b).The SPD must be provided to participants within 90 days of becoming a participant or first receiving benefits. If any material changes are made to the plan, a copy of the summary of material modifications must be sent to participants 210 days after the close of the plan year in which the modification took place and an SPD sent every fifth year. If no material changes occurred, a new SPD must be provided every tenth year. [24] 29 U.S.C. § 1021(f). [25] 29 U.S.C. § 1025(a). [26] 29 C.F.R. § 4007.3. Large DB plans with 500 or more participants are required to submit an annual flat-rate premium filing. Plans with 500 or more participants provide reconciliation of the estimated flat- rate premium paid earlier in the year with the actual flat-rate premium, plans with fewer than 500 participants provide the flat-rate premium, and underfunded single-employer plans provide the variable- rate premium. [27] Single-employer DB plans submit schedule SB (40,083 submitted in plan year 2011) and multiemployer DB plans and certain money purchase plans submit schedule MB (1,326 submitted in plan year 2011). [28] 29 U.S.C. § 1024(d).The multiemployer summary plan information is not provided to participants but only to contributing employers and employee organizations. [29] 29 U.S.C. § 1366. The notification to substantial employers is not provided to participants, but only to contributing sponsors that constitute a substantial employer for the preceding year to notify them of this status. [30] 26 C.F.R. §§ 1.401(k)-1(e)(2)(ii) and 1.403(b)-5(b)(2). [31] 29 C.F.R. § 2550.404a-5. [32] 26 U.S.C. § 401(k)(13). Certain 401(k) plans, including some automatic enrollment plans, use a specific design known as a safe harbor. 26 U.S.C. § 401(k)(12) and 13. Such plans are deemed to satisfy the applicable test to determine that a plan does not discriminate in favor of highly-compensated employees by meeting either the nonelective contribution or matching contribution requirement. They are divided into two types based on their inclusion of additional optional criteria, such as automatic enrollment and the level of contributions. 26 C.F.R. § 1.401(k)-3(a) and (b). [33] GAO, Retirement Savings: Automatic Enrollment Shows Promise for Some Workers, but Proposals to Broaden Retirement Savings for Other Workers Could Face Challenges, [hyperlink, http://www.gao.gov/products/GAO-10-31] (Washington, D.C.: Oct. 23, 2009). [34] 29 U.S.C. § 1104(c)(5). [35] 26 U.S.C. § 414(w)(4). [36] 26 U.S.C. § 401(k)(13)(E). [37] 29 U.S.C. § 1108(g)(6). One survey, conducted by SEI Research, found that 78 percent of DC plans partner with a fiduciary advisor. SEI Defined Contribution Management Research Panel Survey. February 2012. The poll was completed by 138 executives overseeing U.S. DC plans ranging in size from $25 million to over $3 billion in assets. [38] 26 U.S.C. § 6057(e) and 29 U.S.C § 1025(c). Plan sponsors must also file an 8955-SSA when previously reported participants with deferred vested benefits receive a distribution of those benefits. In plan year 2012, plan sponsors submitted 316,581 8955-SSAs, which is equal to about one-third of the Form 5500, EZ, and SF reports filed in fiscal year 2011. [39] Agencies provided data from various time periods measured by plan years and fiscal years from 2011-2012. [40] Specifically, the law requires single-employer DB plans to provide PBGC with information annually regarding the plan's assets and liabilities and copies of the plan's financial statements if any of the plan's contributing sponsors or control group members maintained a plan that meets one of the following conditions during an information year: (1) a plan with a funding target attainment percentage of less than 80 percent; (2) a plan that meets the conditions for imposition of a lien; or (3) a plan that has been granted minimum funding waivers in excess of $1 million and a portion is still outstanding. 29 U.S.C. § 1310. Certain waivers apply if, for example, the controlled group's aggregate underfunding does not exceed $15 million. 29 C.F.R. § 4010.11. [41] Section 4010 filers file at the corporate (controlled group) level and provide information at the plan level in the same filing. Controlled group submissions may include information for more than one plan. The 340 submissions in 2011 represents 598 plans. Due to the grouped filing and exceptions and waivers regarding who must file a 4010, the number of plans represented in 4010 submissions is significantly smaller than the number of underfunded plans. [42] ERISA imposes certain obligations on plan fiduciaries. Under ERISA, a person generally acts as a plan fiduciary when he or she (1) exercises any discretionary control or authority over plan management or any authority or control over plan assets, (2) renders investment advice for compensation respecting plan assets, or has authority or responsibility to do so, or (3) has any discretionary authority or responsibility over plan administration. 29 U.S.C. § 1002(21). [43] 29 U.S.C. § 1021(f)(1). [44] 29 U.S.C. § 1426(e)(2). [45] GAO, Private Pensions: Timely and Accurate Information Is Needed to Identify and Track Frozen Defined Benefit Plans, [hyperlink, http://www.gao.gov/products/GAO-04-200R] (Washington, D.C.: Dec 17, 2003). [46] [hyperlink, http://www.dol.gov/ebsa/pdf/rdguide.pdf]. [47] [hyperlink, http://www.pbgc.gov/prac/reporting-and- disclosure.html]. [48] [hyperlink, http://www.irs.gov/Retirement-Plans/Plan-Sponsor/A- plan-Sponsor's-Responsibilities]. [49] [hyperlink, http://www.irs.gov/Retirement-Plans/Plan-Participant,- Employee/Retirement-Topics---Notices]. [50] Exec. Order No. 13,563, 76 Fed. Reg. 3821 (Jan. 21, 2011). This order calls for a periodic review of existing regulations and determination of whether any of them should be modified, streamlined, expanded or repealed. [51] Amendments to the Abandoned Plan Regulations, 77 Fed. Reg. 74,063 (Dec. 12, 2012). [52] Reportable Events and Certain Other Notification Requirements, 78 Fed. Reg. 20,039 (Apr. 3, 2013). PBGC has also proposed revisions to premium due dates and related changes intended to reduce regulatory burden. Premium Rates; Payment of Premiums; Reducing Regulatory Burden, 78 Fed. Reg. 44,056 (July 23, 2013) [53] 44 U.S.C. § 3506(b)(1)(A). A central goal of OMB review is to help agencies strike a balance between collecting information necessary to fulfill their statutory missions and guarding against unnecessary or duplicative information that imposes unjustified costs on the American public. Under the Paperwork Reduction Act, OMB may approve a request for information collection for up to three years at one time. 44 U.S.C. § 3507(g). [54] 29 C.F.R. § 2550.408b-2. Because such reporting is from service providers to plan sponsors and fiduciaries it is not included in our lists of required reports and disclosures submitted by plan sponsors in appendix II. [55] 29 U.S.C. § 1024. [56] We evaluated summaries of calls to Labor benefits advisors from participants and beneficiaries between October 1, 2011 and December 31, 2012, to more fully include the perspective of participants on disclosures in this review. The information is not representative of the views of all plan participants, but only those who called Labor. The information we reviewed took the form of summaries logged by benefits advisors, not full transcripts of conversations. [57] Form SSA-L99-C1. [58] 26 U.S.C. § 6057(a). Each month, SSA checks the name and Social Security number of each new claimant for Social Security benefits to determine whether the claimant is listed in SSA's pension benefit record. SSA mails a notice to each new claimant that the data indicates may be entitled to a benefit. [59] The SSA mails about 90,000 of these notices to new Social Security claimants each month, as required under 42 U.S.C. § 1320b- 1(a). SSA also sends these notices to individuals upon request, and to claimants of a lump-sum death payment or hospital insurance coverage under Title XVIII of the Social Security Act. The notice is provided on Form SSA L99-C1. [60] A recent study by the SSA's Office of Inspector General found that when participants inquired about the benefits listed in the notice, they sometimes found that they were not actually due. Specifically, the study found that of the 14 cases they reviewed where participants made inquiries that had been resolved, 11 were not due benefits. Social Security Administration, Office of the Inspector General, Quick Response Evaluation, Employee Retirement Income Security Act Notices, A-13-11-01141, September, 2011. [61] Data on participant calls to Labor show that Labor also helps participants understand the notice. [62] The potential private pension benefit information notice (Form SSA-L99-C1) states: "If you have questions, you should contact the Plan Administrator. If you cannot locate the Plan Administrator, contact your former employer. If you cannot locate your former employer, check the reference department of your local library or contact your State's corporation commission. This agency should be in the State Government section of the telephone directory." [63] Although the data on benefits owed is not verified, SSA officials said they do verify that the Social Security number listed in the notice is valid. [64] 26 U.S.C. § 6011(e)(1). The information on the 8955-SSA was previously included on the Form 5500. However, when the 5500 was required to be submitted electronically in 2010, the form was stripped of information that was required to be reported to IRS to comply with the statutory prohibition. As a result, a separate 8955-SSA form was created. Treasury recently proposed regulations that would mandate electronic filing for form 8955-SSA to the extent permitted by current statute. Employee Retirement Benefit Plan Returns Required on Magnetic Media, 78 Fed. Reg. 53,704 (Aug. 30, 2013). [65] We previously reported on the challenges of the 401(k) rollover process [hyperlink, http://www.gao.gov/products/GAO-13-30]. If a participant's pool of retirement savings is fragmented across multiple plans and IRAs, over time, the sum of the fees associated with the various plans may be greater than if the participant had consolidated their savings. We previously reported that even a seemingly small fee, such as a 1 percent annual charge, can significantly reduce 401(k) plan savings over the course of an individual's career. GAO, Private Pensions: Changes Needed to Provide 401(k) Plan Participants and the Department of Labor Better Information on Fees, [hyperlink, http://www.gao.gov/products/GAO-07-21] (Washington, D.C.: Nov. 16, 2006). [66] In response to a provision in the PPA (§ 410, 120 Stat. 934-35), PBGC recently published a request for information from the public about including the benefits of missing participants in terminating individual account (i.e., DC) plans. Missing Participants in Individual Account Plans, 78 Fed. Reg. 37,598 (June 21, 2013). Under ERISA, PBGC locates missing participants in insured DB single-employer plans that have terminated (29 U.S.C. § 1350), and is currently in the process of expanding the program to include DC plans, multiemployer DB plans, and the plans of small professional services employers. [67] For more on how we evaluated disclosures on these factors, see appendix 1. [68] ERISA established an Advisory Council on Employee Welfare and Pension Benefit Plans, known as the ERISA Advisory Council (EAC). 29 U.S.C. § 1142.The duties of the EAC are to advise the Secretary of Labor and submit recommendations regarding the Secretary's functions under ERISA. [69] The EAC solicited testimony from witnesses from a broad cross- section of the retirement community, including Labor officials and representatives from associations, service providers, academics, and participant advocacy groups in 2009. See Advisory Council on Employee Welfare and Pension Benefit Plans. Promoting Retirement Literacy and Security by Streamlining Disclosures to Participants and Beneficiaries, accessed October 2, 2012, [hyperlink, http://www.dol.gov/ebsa/publications/2009ACreport2.html]. [70] Representatives of one participant advocacy group noted that, to help participants better understand their benefits; participants should also have continuous access to previous SPDs, as well as better information about their benefits. Specifically, it was suggested that those in DC plans should be provided projected monthly benefits at different retirement ages (i.e., if their current savings were converted to a lifetime annuity at age 55, 60, and 65). In 2010, Labor and IRS published a request for information that would be relevant to such a suggestion. Request for Information Regarding Lifetime Income Options for Participants and Beneficiaries in Retirement Plans, 75 Fed. Reg. 5,253 (Feb. 2, 2010). Another participant advocate said participants in DB plans should be provided information about how their benefit was calculated (i.e., if the formula is 30 percent of the average of the 3 highest earning years, participants should be provided the data used in the calculation--specifically, which were the highest earning years and how much income was recorded for each of those years). [71] Labor provides a link to a model notice which satisfies the disclosures required by both the IRC (26 U.S.C. §§ 401(k)(13) and 414(w)), and ERISA (29 U.S.C. §§ 1104(c)(5) and 1144(e)(3)) in Field Assistance Bulletin 2008-03, [hyperlink, http://www.irs.gov/pub/irs- tege/sample_notice.pdf]. [72] We previously recommended Congress consider consolidating these funding notices to eliminate duplication. GAO, Private Pensions: Changes Needed to Better Protect Multiemployer Pension Benefits, [hyperlink, http://www.gao.gov/products/GAO-11-79] (Washington, D.C.: October 18, 2011). [73] GAO, Private Pensions: Changes Needed to Better Protect Multiemployer Pension Benefits, [hyperlink, http://www.gao.gov/products/GAO-11-79] (Washington, D.C.: Oct. 18, 2011). [74] U.S. Department of Labor, Summary Plan Description Requirements under ERISA: Supporting Statement for Paperwork Reduction Act Submissions, OMB Number 1210-0039, April 2013. [75] In addition, when the plan administrator changes the content of the SPD, participants are not required to be provided a summary of the material modifications until 210 days after the end of the plan year in which the change was made. In testimony before the EAC in 2005, several witnesses said that deadline was so late it made the summary useless to the participant. [76] Actuarial information included in the annual report must be displayed on any intranet website maintained by the plan sponsor for the purpose of communicating with employees. 29 U.S.C. § 1024(b). Generally, a plan's full annual report is publicly available online on Labor's website. We also found several employers willing to post their plan's SPD to their public website. [77] In the past, plan sponsors were also required to file SPDs with Labor. The Taxpayer Relief Act of 1997 eliminated that requirement. [78] The rollover notice is required under 26 U.S.C. § 402(f). We recently reported that 401(k) plan participants separating from their employers need help to obtain and understand information about their distribution options. If participants have more than $5,000 in their account and are not normal retirement age, they can generally leave their funds with their previous employer, but the 402(f) notice does not mention that option. We reported that an employer-sponsored plan environment generally has lower fees and better comparative information. Also, with employer-sponsored plans, ERISA plan fiduciaries are required to select and monitor investment options in the best interest of participants. GAO, 401(k) Plans: Labor and IRS Could Improve the Rollover Process for Participants, [hyperlink, http://www.gao.gov/products/GAO-13-30] (Washington, D.C.: March 7, 2013). [79] A fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and for the exclusive purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the plan. 29 U.S.C. § 1104. [80] In some instances, the statute expressly provides that agencies are to treat sponsors as having complied with a particular disclosure requirement if model notices are used. But, because a given model cannot apply in all circumstances, the instructions generally direct the plan sponsor to provide additional content as appropriate for the plan. For example, the instructions for the QACA model notice state that a plan sponsor will need to add to, subtract from, or otherwise change the sample notice to the extent a plan's form and operations differ from the hypothetical QACA described in the sample notice, so that the actual notice accurately reflects the provisions of the plan. [81] For example, one participant advocacy group testified before the EAC that model notices are a great help to employers, but they are also vitally important to participants because notices generated by plans are often confusing. [82] Plain Language Action and Information Network, Federal Plain Language Guidelines, (March 2011), accessed September 6, 2013, [hyperlink, http://www.plainlanguage.gov/howto/guidelines/bigdoc/fullbigdoc.pdf]. Federal plain language guidelines are maintained by federal employees. For further details on our plain language analysis, see appendix I. The Plain Writing Act of 2010 also calls for writing that is consistent with best practices appropriate for the intended audience. 5 U.S.C. § 301. Such writing avoids jargon, redundancy, ambiguity, and obscurity. [83] For further details on our methodology for conducting this analysis, see appendix I. None of the agencies provides a comprehensive list of model notices. As a result, we continued to discover additional models over the course of our review. We conducted this readability analysis on the first 10 of the 16 we identified (see table 3). In addition, we identified other instances of agency model language for certain situations. For example, we found sample language on Labor's website to help plan sponsors prepare disclosures dealing with qualified domestic relations orders, and a sample paragraph in Labor's regulations (29 C.F.R. § 2520.102-2) for plan sponsors to use when they need to explain to non-English speakers how to obtain assistance understanding their SPD. [84] The models we reviewed were all written in English. While none of them contained sample language plan sponsors could use to inform non- English speakers how to obtain assistance in their language, we did find that IRS produced a version of the Saver's Credit model notice in Spanish as well as English in IRS Announcement 2001-120. [85] 29 C.F.R. §§ 2520.102-2(c) and 1520.104b-10(e). Specifically, assistance must be offered if the plan contains under 100 participants and 25 percent are literate only in the same foreign language, or if the plan covers more than 100 participants and either 500 participants or 10 percent of participants, whichever is less, are literate in only that same foreign language. [86] To determine the reading level at which model notices were written, we selected and used one of many widely available automated readability tools, the Flesch-Kincaid Grade-Level (FKGL) test. For more on the FKGL tool, see appendix I. However, a participant advocacy group representative noted that to gauge understandability, it is important to also take the organization and presentation of the content into account. Another participant advocacy group representative suggested that to ensure understandability model notices should be field-tested with people who have low levels of education. [87] In contrast, the Social Security Administration standards require its disclosures to be written between a sixth-and eighth-grade reading level. [88] Labor officials also consider their benefits advisors program, in which benefits advisors are available to field phone calls from participants, as addressing readability. We considered disclosure readability based solely on the written content of disclosures sent to participants. Participants who call Labor and ask a benefits advisor to explain disclosure content may gain a better understanding of the content than participants who do not call. [89] In some instances, the model disclosure provided a template for only a portion of the content a participant would receive. For example, Labor provides a model statement of participant rights under The Employee Retirement Income Security Act of 1974 (ERISA) to be included in the summary plan description (SPD), and a model comparative chart to be included in participant fee disclosures, but the disclosures are required to include additional information beyond the text in the models. [90] Federal plain language guidelines are maintained by federal employees and are available at [hyperlink, http://www.plainlanguage.gov]. Plain Language Action and Information Network, Federal Plain Language Guidelines, (March 2011), accessed September 6, 2013, [91] This part of our readability analysis included the first 10 model disclosures we identified over the course of our review. [92] Throughout the report, disclosures to participants include those to beneficiaries and alternate payees. We also identified a small number of disclosures made by multiemployer plan sponsors to employers. [End of section] GAO’s Mission: The Government Accountability Office, the audit, evaluation, and investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. GAO examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help Congress make informed oversight, policy, and funding decisions. GAO’s commitment to good government is reflected in its core values of accountability, integrity, and reliability. Obtaining Copies of GAO Reports and Testimony: The fastest and easiest way to obtain copies of GAO documents at no cost is through GAO’s website [hyperlink, http://www.gao.gov]. 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