ERISA Compliance for the Summary Annual Report (SAR)

So many focus on e-filing the Form 5500 on time, that they overlook the mandate to distribute the Summary Annual Report (SAR) to the participants. The following are key points to know and apply to prevent compliance mishaps. Also provided are important attributes to keep in mind on electronic distribution for the SAR.

• The SAR fulfills the disclosure requirement of ERISA. (The 5500 fulfills the reporting requirement.)
• The SAR is to be distributed to plan participants enrolled in the employee welfare benefit plan including:
  • Active employees
  • Former employees enrolled via COBRA
  • Former employees who were enrolled during the plan year who are not enrolled in COBRA
  • DOL regulations require the plan sponsor to be prepared to prove that it furnished one in a way that was “reasonably calculated to ensure actual receipt,” using a method “likely to result in full distribution.”
  • Plan sponsors may send through an email or posting on the plan sponsor’s website.
    • Website Retention. Covered documents must remain on the intranet until superseded by a subsequent version, but in no event for less than one year.

    Sources on electronic distribution: Cornell Law and the Federal Register.

    For any questions or the need for additional information, feel free to reach out to Ann McAdam at amcadam@wrangle5500.com.

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