The American Institute of CPAs (AICPA) has submitted comments to the U.S. Department of Labor (DOL) regarding a joint DOL, Internal Revenue Service (IRS) and Pension Benefit Guaranty Corporation (PBGC) proposal to revise the reporting Form 5500 Series for employee benefit plans and the DOL’s proposed regulations to implement the revisions.
In a November, 22 comment letter, the AICPA wrote, “We believe many of the proposed changes will serve to achieve the Agencies’ stated goals. However, certain of them, if adopted in their current form, would create inconsistencies and greater confusion about the reporting requirements. Our comments are intended to help the Agencies identify the proposed disclosures that we believe require a more careful analysis of the purpose, benefit, and cost.”
The AICPA letter also stated, “The Proposal requires plans to disclose additional information—in some cases at significant additional effort and cost.” The AICPA expressed concern that the additional burden and cost to comply with the new reporting requirements could have unintended negative consequences. 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. The increased burden and cost may lead some plan sponsors to rethink plan sponsorship or to reduce the level of benefits provided.” The AICPA called for public hearings because of the magnitude of the proposed changes.
The AICPA also submitted a related comment letter about DOL’s proposed regulations to implement the proposed Form 5500 revisions. The AICPA wrote that it supported the DOL’s proposal to make the certifications for limited scope audits more detailed and informative. The letter stated that “requiring certifications be included as part of the Form 5500 submission may provide greater transparency.” The AICPA also offered suggestions for improving the proposed certification rules.
See the November 29 Journal of Accountancy story for more information.