Changes to Employee Benefit Report

By Stephen Barlas
February 1, 2017

The Department of Labor, Internal Revenue Service, and Pension Benefit Guaranty Corporation have proposed some fairly major changes to the financial reporting aspects of Form 5500, which large and small companies use to report employee benefit information. Form 5500, Annual Return/Report of Employee Benefits, serves as the principal source of information and data available to the federal agencies concerning the operations, funding, and investments of approximately 806,000 pension and welfare benefit plans.


The agencies are proposing to modify the asset breakouts on the balance sheet component of the Schedule H to enable more accurate and detailed reporting on the types of assets held by a plan, including alternative investments, hard-to-value assets, and investments through collective investment vehicles. The AICPA is worried about potential unintended consequences, saying, “Sponsors that cannot afford (or are unwilling to pay for) the increased fees of plan sponsorship that result from these new requirements may decide to pass the additional costs on to plan participants. Alternatively, plan sponsors may look for options that could jeopardize the quality and accuracy of the information filed.”


Stephen Barlas has covered Washington, D.C., for trade and professional magazines since 1981 and since 1984 for Strategic Finance and its predecessor Management Accounting. You can reach him at sbarlas@verizon.net.
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