5500 Schedule C Reporting Delay and Additional Guidance Needed
SIMSBURY, CT, March 25, 2009 -- A substantial majority of retirement plan service providers are unsure about how to comply with the new Form 5500 Schedule C reporting requirements, according to a recent survey by The SPARK Institute. "Nearly three quarters of the service providers responding to our survey said that they need additional time and guidance in order to accurately comply with the new rules," said Larry Goldbrum, General Counsel of The SPARK Institute. "We conducted the survey because of concerns brought to us by our members, who are the companies that prepare the forms for plans. We wanted to determine if there was a common understanding with respect to reporting and handling of certain items required by the new requirements," Goldbrum said.
"In some instances, according to our survey, respondents were equally split on key reporting issues," Goldbrum said. "Consequently, different interpretations and reporting practices will result in inconsistent and unreliable data and significant resources will be spent on making systems changes that will be of little or no value to plan sponsors, the DOL or anyone else that uses the data."
"Nearly 80 percent of the survey respondents said they expect to make systems changes to accommodate the new regulations, and a significant number are unsure whether they will be ready in time to meet the current deadline," Goldbrum said. He also noted that the new regulations will have an impact on plan sponsors. "A significant majority (58%) of respondents reported that they are changing their 5500 service offering as a result of the new requirements, and many (32%) will charge an additional fee for the service," Goldbrum said. "More than two-thirds (68%) of the service providers surveyed also said they expect that plan sponsors will have to collect some required data that was not required of them in the past.
The survey was completed by SPARK Institute member companies that collectively serve approximately 174,000 plans with nearly 34 million participants.
A copy of the survey results and analysis are available to the media upon request.
About the SPARK Institute
The SPARK Institute is the leading voice in Washington for the retirement services industry. Through the combined expertise of its member companies, The SPARK Institute provides research, education, testimony and comments on pending legislative and regulatory issues to members of Congress and relevant government agency officials. Collectively, its members serve over 95% of the nation's 401k participants and more than 90% of all 403(b) plan participants.
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