Report to Congressional Committees

United States Government Accountability Office

GAO

June 2005 PRIVATE PENSIONS

Government Actions 

Could Improve the 

Timeliness and 

Content of Form 5500 

Pension Information 

GAO-05-491 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

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Highlights of GAO-05-491, a report to 

congressional committees 

June 2005

PRIVATE PENSIONS

Government Actions Could Improve the 

Timeliness and Content of Form 5500 

Pension Information 

Detailed information on private pension plans is reported on the Form 5500, 

and Labor, IRS, and PBGC use the information for compliance, research, and 

public disclosure purposes. Information collected on the form includes basic 

plan identifying information as well as detailed information including assets 

and liabilities, insurance, and financial transactions. The principal users of 

Form 5500 Reports–Labor, IRS, and PBGC–use the reports primarily as a 

compliance tool to identify actual and potential violations of the Employee 

Retirement Income Security Act of 1974 and the Internal Revenue Code. 

Other federal agencies and policy researchers also use Form 5500 

information. 

Statutory reporting requirements, processing issues, and current Labor 

practices affect the timeliness of the release of Form 5500 information, 

resulting in a 3 year lag, in some cases, in releasing certain usable 

computerized Form 5500 information to the non-principal federal agencies 

and others. First, under the current statutory reporting requirements, filers 

can have up to 285 days after the end of the plan year to file their Form 5500. 

Second, 98 percent of filings are in a paper format. These take more than 

three times as long as electronic filings to process and have twice as many 

errors. Third, the release of the Form 5500 information in the research file–

the Form 5500’s most practical form–is further delayed because Labor waits 

until all filings for that plan year are processed, which can take up to 2 years. 

Despite the efforts of Labor, IRS, and PBGC to improve its content, the Form 

5500 lacks key information. These agencies have taken certain steps to 

improve the content of the Form 5500, such as reviewing the Form 5500 

annually to ensure that the form is collecting all the information required by 

law. However, the form still lacks key information that could better assist 

Labor, IRS, and PBGC in identifying and tracking all plans over time and 

monitoring multiemployer plans. Federal and private sector researchers also 

told us the form could collect better plan financial information, such as 

40l(k) plan fees. In addition, federal agency officials told us certain 

information could be reported earlier than the current filing deadline, such 

as information on a plan’s funding status, as well as its assets and liabilities. 

Timeliness of the Processing and Release of Form 5500 Information 

The Form 5500 is the primary 

source of information for both the 

federal government and the private 

sector regarding the operation, 

funding, assets, and investments of 

private pension and other 

employee benefit plans. Currently, 

the Department of Labor (Labor) 

requires about 3 years to provide 

certain usable Form 5500 

information to the public, leading 

to complaints that the information 

is not timely. We have prepared 

this report under the Comptroller 

General's authority, and it is 

intended to assist Congress in 

improving the timeliness and 

content of Form 5500 information. 

This report is addressed to the 

congressional committees of 

jurisdiction. It examines: (1) the 

information reported on the form 

and how it is used, (2) factors that 

affect the timeliness of Form 5500 

information, and (3) issues 

affecting the content of the form. 

What GAO Recommends

GAO makes recommendations to 

Labor, the Internal Revenue 

Service, and the Pension Benefit 

Guaranty Corporation aimed at 

improving the timeliness and 

content of Form 5500 information 

such as requiring the electronic 

filing of Form 5500 and making 

modifications to the form. 

Labor, IRS, and PBGC generally 

agreed with our recommendations. 

Also, Labor, IRS, PBGC, and the 

Social Security Administration 

provided technical comments on 

the draft. We incorporated each 

agency’s comments as appropriate. 
Page i GAO-05-491 Private Pensions 

Letter 1

Results in Brief 3 

Background 6 

Form 5500 Reports Provide Detailed Private Pension Plan 

Information, Which Is Primarily Used to Determine Compliance 

with Federal Laws 11 

Statutory Reporting Requirements, Current Processing Methods, 

and Labor Practices Delay the Release of Form 5500 Information 20 

Despite Efforts to Improve Its Content, the Form 5500 Lacks Key 

Information 36 

Conclusions 43 

Recommendations 44 

Agency Comments 46 

Appendix I Comments from the Department of Labor 49 

Appendix II Comments from the Pension Benefit Guaranty 

Corporation 52 

Appendix III Comments from the Internal Revenue Service 54 

Appendix IV GAO Contacts and Staff Acknowledgments 55 

Tables 

Table 1: Information Reported on the Form 5500 and Schedules 12 

Table 2: Filing Requirements for Form 5500, Schedules, and 

Attachments 14 

Table 3: Examples of Federal Agencies That Use Form 5500 

Information 18 

Table 4: Recommendations from Pension Practitioners and Service 

Providers for Further Streamlining the Form 5500 43 

Contents 
Page ii GAO-05-491 Private Pensions 

Figures 

Figure 1: Participants of Defined Benefit and Defined Contribution 

Pension Plans, 1980-2000 8 

Figure 2: Assets of Defined Benefit and Defined Contribution 

Pension Plans, 1980-2000 9 

Figure 3: Defined Benefit and Defined Contribution Pension Plans, 

1980-2000 10 

Figure 4: Example of Statutory Deadlines to File Form 5500 for 

Calendar Year Plan 21 

Figure 5: Timeline of Statutory Deadlines for a Calendar Year Plan 22 

Figure 6: Example of Coordination and Information Flow Required 

for Form 5500 Preparation 24 

Figure 7: Example of a Timeline of Form 5500 Preparation for a 

Calendar Year Defined Benefit Plan 27 

Figure 8: Form 5500 Reports 29 

Figure 9: Example of a Form 5500 Being Processed through EFAST 

with Errors 32 

Figure 10: Timeline for the Preparation of the 2000 Form 5500 

Research File 34 

Abbreviations

ARC Actuarial Research Corporation 

CCT common or collective trust 

DFE direct filing entity 

EBSA Employee Benefits Security Administration 

EFAST ERISA Filing Acceptance System 

EIN employer identification number 

ERISA Employee Retirement Income Security Act of 1974 

ESOP Employee Stock Ownership Plan 

GDI gross domestic income 

GDP gross domestic product 

GIC guaranteed investment contract 

IRC Internal Revenue Code 

IRS Internal Revenue Service 

Labor Department of Labor 

MTIA master trust investment account 

OCR Optical Character Recognition 

OMB Office of Management and Budget 
Page iii GAO-05-491 Private Pensions 

OPR Office of Policy and Research 

PBGC Pension Benefit Guaranty Corporation 

PIN personal identification number 

PSA pooled separate account 

RICS Returns and Inventory Classification System 

SAR Summary Annual Report 

SEC Securities and Exchange Commission 

SSA Social Security Administration 

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Page 1 GAO-05-491 Private Pensions 

June 3, 2005 

Congressional Committees 

The Form 5500 Report is the primary source of information for both the 

federal government and the private sector regarding the operation, 

funding, assets, and investments of private pension plans and other 

employee benefit plans.1

 The Department of Labor (Labor), the Internal 

Revenue Service (IRS), and the Pension Benefit Guaranty Corporation 

(PBGC) jointly developed the Form 5500 so employee benefit plans could 

satisfy annual reporting requirements under the Employee Retirement 

Income Security Act of 1974 (ERISA) and the Internal Revenue Code 

(IRC). Over 700,000 private pension plans must file the Form 5500 

annually, representing over $4.4 trillion in assets and covering over 100 

million participants. 

Labor, IRS, and PBGC use the Form 5500 to collect information for their 

various roles in regulating and monitoring private pension plans. Labor 

enforces ERISA’s reporting and disclosure provisions and fiduciary 

responsibility standards, which among other things, concern the type and 

extent of information provided to the federal government and plan 

participants and how pension plans are operated in the interests of plan 

participants. IRS enforces standards that relate to such matters as how 

employees become eligible to participate in benefit plans, how they 

become eligible to earn rights to benefits, and how much, at a minimum, 

employers must contribute. PBGC insures the benefits of participants in 

defined benefit private pension plans.2

We have prepared this report under the Comptroller General’s authority, 

and it is intended to assist the Congress in improving the timeliness and 

content of Form 5500 pension information. As it may prove helpful in the 

deliberations of committees with jurisdiction over pension issues, we have 

 1

For the purposes of this report, we will be discussing Form 5500 Reports as they relate to 

private pension plans. 

2

Some defined benefit plans are not covered by PBGC insurance; for example, plans 

sponsored by professional service employers, such as physicians and lawyers, with 25 or 

fewer employees. Some employers do not include all their employees in their defined 

benefit plans. 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-491 Private Pensions 

addressed this report to each of these committees. Recent changes in 

private pension finance have highlighted the need for timely and useful 

Form 5500 information. Since 2000, private pension underfunding in 

defined benefit plans has increased dramatically, and additional severe 

losses may be on the horizon. Consequently, we placed PBGC’s singleemployer insurance program on our high-risk list of programs that present 

significant vulnerabilities to the federal government, and policy makers 

have given their attention to ways to strengthen and stabilize plan 

funding.3

In 1999, Labor, IRS, and PBGC implemented a new computerized system 

called the ERISA Filing Acceptance System (EFAST) to improve the 

processing of the forms. Because it is important that pension information 

be both timely and useful, we are reporting on (1) the information 

reported on the Form 5500 and how it is used, (2) the factors that affect 

the timeliness of Form 5500 information, and (3) issues affecting the 

content of the Form 5500. 

To complete this work, we reviewed the Form 5500 and its filing 

requirements and the laws that require the filing of regulatory reports on 

pensions. We also interviewed officials from Labor, IRS, PBGC, and other 

federal agencies as well as pension experts that use this information. In 

addition, we analyzed documents regarding the Form 5500 information 

federal agencies collect and their reasons for obtaining it. As a basis for 

our analysis of the factors that affect the timeliness of Form 5500 

information, we examined the Form 5500 statutory reporting requirements 

as well as the preparation and processing procedures for the Form 5500. 

We interviewed representatives of the contractor that operates EFAST to 

determine the amount of time needed to process Form 5500 Reports. 

Further, we reviewed EFAST operating procedures, contracts, and 

performance reports, and conducted a site visit to the EFAST processing 

center to examine how Form 5500 Reports are processed. We also 

conducted interviews with parties involved in preparing and filing Form 

5500 Reports, including plan sponsor representatives, actuaries, 

accountants, service providers,4

 insurance companies, and financial 

institutions to determine the time and effort that is needed to prepare and 

file the forms. 

 3

GAO, High Risk Series: An Update, GAO-05-207 (Washington, D.C.: January 2005). 

4

Throughout this report, the term “service providers” will be used to refer to those private 

sector entities that prepare Form 5500 Reports on behalf of plan sponsors. 
Page 3 GAO-05-491 Private Pensions 

To determine the factors affecting the release of usable Form 5500 

information to the public, we interviewed Labor officials responsible for 

releasing Form 5500 information products to the public and to government 

users. We also interviewed the government contractors that participate in 

the preparation of these Form 5500 products. To determine the issues 

affecting the content of the Form 5500, we reviewed current initiatives 

aimed at improving its content and conducted interviews with federal 

agency officials, industry association representatives, service providers, 

and pension experts that either use or prepare Form 5500 Reports. We 

conducted our work between June 2004 and June 2005 in accordance with 

generally accepted government auditing standards. 

Detailed information on private pension plans is reported on the Form 

5500, and Labor, IRS, and PBGC use the information for compliance, 

research, and public disclosure purposes. Information collected on the 

form includes basic plan identifying information as well as detailed plan 

information including assets, liabilities, insurance and financial 

transactions plus financial statements audited by an independent public 

accountant, and for defined benefit plans, an actuarial statement. In 

addition, information about plan characteristics, such as plan type 

(defined benefit or defined contribution),5

 method of funding, numbers of 

employees and participants, and employees who are excluded from the 

plan for various reasons are also reported on the form. The principal users 

of Form 5500 information include Labor, IRS, and PBGC. These agencies 

use Form 5500 Reports primarily as a compliance tool to identify actual 

and potential violations of ERISA and the IRC. They also use the Form 

5500 to develop pension plan statistics and support policy formulation. In 

addition to the three principal users, other federal agencies, researchers, 

and private sector entities also use Form 5500 information to publish 

government statistics and assess employee benefit, tax, and economic 

trends and policies. The Form 5500 is also made available to the general 

public, and Labor makes the information available to public agencies, 

private organizations, and individuals. 

 5

Defined benefit plans provide a guaranteed benefit generally expressed as a monthly 

benefit based on a formula that combines salary and years of service to the company. 

These plans express benefits as an annuity, but many offer departing participants the 

opportunity to receive lump sum distributions. Defined contribution plans establish 

individual accounts for employees to which employers, participants, or both make periodic 

contributions. In addition, defined contribution plan participants may be able to direct the 

investment of the assets in their accounts. 

Results in Brief 
Page 4 GAO-05-491 Private Pensions 

Statutory reporting requirements, processing issues, and current Labor 

practices affect the timeliness of the release of available Form 5500 

information, in some cases, resulting in a 3 year delay in non-principal 

federal agencies, researchers, and others receiving usable computerized 

Form 5500 information. First, under the current statutory reporting 

requirements, filers have up to 285 days to file their Form 5500s–a plan has 

210 days from the end of the plan year to file its Form 5500, and filers may 

apply for an extension of an additional 2 1⁄2 months. Service providers have 

told us this time frame is necessary because of the coordination with 

multiple parties, such as actuaries, accountants, and insurance companies 

to obtain information. Second, once the form is submitted, it must be 

processed through EFAST, which further affects the timeliness. Given that 

there is no electronic filing requirement and the process for plan sponsors 

to obtain and use an electronic signature to authenticate filings is 

burdensome, 98 percent of filings are submitted in a paper format, which 

Labor reported can take more than three times longer to process than 

electronic filings and contain twice as many errors. Also, EFAST’s data 

correction process can add up to 120 days to the processing, largely 

because once Form 5500s are submitted, the errors are caught and 

corrections are done through a paper–based correspondence process with 

the plan sponsors. Third, once the forms have been processed through 

EFAST, Labor waits until it has processed all filings for that plan year 

before releasing Form 5500 information in its most practical form—the 

research file. Labor’s practice results in additional delays, because some 

filings may be caught up in EFAST’s lengthy correspondence process to 

reconcile errors, and non–calendar year plan filings could be submitted up 

to a year later than calendar year plan filings but still be considered part of 

the same plan year. Agency officials told us that the timeliness of Form 

5500 Reports affects their use of the information. 

Despite the efforts of Labor, IRS, and PBGC to improve its content, the 

Form 5500 lacks key information. Each agency has taken steps to improve 

the content of the form, such as reviewing the Form 5500 annually and 

revising its content as needed to ensure that the form is collecting all the 

information required by law. Labor, IRS, and PBGC officials told us that to 

some extent, they use all of the information collected on the Form 5500. 

However, the form still lacks key information that could better assist these 

three agencies in monitoring plans and ensuring that they are in 

compliance with the law. For example, each agency is unable to accurately 

identify and track all plans from one year to the next based on Form 5500 

information, which impairs Labor’s ability to verify whether all required 

employers are meeting the statutory requirement to file a Form 5500 

annually. Additionally, PBGC is unable to identify employers participating 
Page 5 GAO-05-491 Private Pensions 

in multiemployer pension plans and the risks attending their financial 

condition, leaving the agency unable to gauge the impact that events such 

as employer bankruptcies, withdrawals, and labor strikes would have on 

multiemployer plans, their participants, and PBGC’s multiemployer 

insurance program. In addition, federal agency officials and researchers 

who use Form 5500 information say that the form has not kept pace with 

changes that have occurred in the pension plan universe, such as the shift 

from defined benefit to defined contribution plans. Consequently, the form 

lacks certain information on defined contribution plans that they say 

would give them further insight into the condition of the private pension 

plan universe, such as detailed financial information on plan fees and 

401(k) plan matching contributions, which could be used for research or 

regulatory purposes. With regard to defined benefit plans, federal and 

private sector researchers said the form does not collect data that would 

inform users whether defined benefit plans have sufficient assets to meet 

their obligations in the event of the plan’s termination. Although federal 

agency officials and others said the form lacks certain information, 

pension practitioners and service providers told us that it could be further 

streamlined by removing certain items and consolidating schedules. 

Because the Form 5500 is the only comprehensive source of financial and 

other plan information on private pension plans collected on a regular 

basis, and is therefore important to pension policy development and 

enforcement, we make several recommendations to Labor, IRS, and PBGC 

that are intended to improve the timeliness and content of Form 5500 

pension information. These recommendations include (1) requiring the 

electronic filing of Form 5500 Reports, (2) working collectively to better 

identify and track plans from year to year, and (3) modifying the Form 

5500 to collect additional information on multiemployer pension plans. In 

general, Labor, IRS, and PBGC agreed with our recommendations. 

Additionally, PBGC proposed an additional recommendation regarding the 

timeliness of defined benefit pension plan funding information reported on 

Form 5500 Schedule B. The Administration’s pension reform proposal 

includes a provision that would advance the statutory reporting date for 

the Schedule B to February 15 for certain large defined benefit plans. 

Although our work focused on the timeliness of processing Form 5500 

data, we agree that advancing the reporting date for certain plans could be 

an important element of comprehensive pension reform. 
Page 6 GAO-05-491 Private Pensions 

ERISA and the IRC require administrators of pension and welfare benefit 

plans (collectively referred to as employee benefit plans) to file annual 

reports concerning, among other things, the financial condition and 

operation of plans. Labor, IRS, and PBGC jointly developed the Form 5500 

so that plan administrators can satisfy this annual reporting requirement.6

The requirements for completing the form vary according to the type of 

plan. If a company sponsors more than one plan, it must file a Form 5500 

for each plan. Additionally, ERISA and the IRC provide for the assessment 

or imposition of penalties by Labor and IRS for plan sponsors not 

submitting the required information when due.7

Form 5500 Reports are shared among Labor’s Employee Benefits Security 

Administration (EBSA), IRS, PBGC, and the Social Security Administration 

(SSA), and each agency uses the Form 5500 to meet its statutory 

obligations. EBSA is responsible for the administration and enforcement 

of ERISA, and its primary purpose is to protect the pension, health, and 

other benefits of participants in private sector employee benefit plans. IRS 

oversees the tax code provisions of the law. PBGC is a federal government 

corporation that guarantees the payments of pension plan benefits to 

participants in the event that covered defined benefit pension plans 

terminate while underfunded. SSA is responsible for notifying each new 

Social Security or Medicare claimant for whom it has pension benefit 

information. Form 5500 Reports are also made available to other federal 

agencies and researchers through Labor. Once the forms for a given plan 

year are processed by EFAST they are available for enforcement and 

public disclosure purposes. In addition, after the forms are edited by 

Labor, the information is compiled into a database of usable computerized 

Form 5500 information, known as the research file, which includes 

information from all plans with over 100 participants and a 5 percent 

sample of all of the smaller plans. The research file is used by various 

federal agencies and pension researchers for conducting policy research 

and developing government statistics. 

 6

A plan administrator is the person specifically designated by the terms of the instrument 

under which the plan is operated. 

7

A plan sponsor is defined as the employer, in the case of a single-employer plan, or 

employee organization in the case of a plan established or maintained by two or more 

employers or jointly by one or more employers or employee organizations. 

Background 
Page 7 GAO-05-491 Private Pensions 

Beginning with plan year 1999, EBSA assumed the administrative 

responsibility for accepting all Form 5500 filings, electronic and otherwise, 

which had previously been filed with IRS. As part of the switch, Labor, IRS 

and PBGC adopted EFAST, which was designed to expedite the receipt 

and processing of Form 5500 filings by relying on paper forms and 

electronic filing technologies. Collectively, all three agencies have 

authority to mandate the electronic filing of the Form 5500.8

There are various types of Form 5500 filers. Filers are classified as either 

single-employer plans, multiemployer plans, multiple-employer plans, or 

direct filing entities (DFEs). In general, a separate Form 5500 must be filed 

for each plan or DFE. Single-employer plans are plans that are maintained 

by one employer or employee organization. Multiemployer plans are 

established pursuant to collectively bargained pension agreements 

negotiated between labor unions representing employees and two or more 

employers, and are generally jointly administered by trustees from both 

labor and management. Multiple-employer plans are plans maintained by 

more than one employer and are typically established without collective 

bargaining agreements. DFEs are trusts, accounts, and other investment or 

insurance arrangements that plans participate in and that are required to 

or allowed to file the Form 5500.9

Filers have a normal deadline of 210 days after the end of the plan year to 

submit their Form 5500 Reports. For example, under the filing deadlines 

for plan year 2001, a calendar year filer must file its Form 5500 by July 31, 

2002. However, a non-calendar year plan, for example, that has a plan year 

that runs from October 1, 2001 to September 30, 2002 would have until 

April 30, 2003 to file its Form 5500.10

When the Form 5500 was first developed, nearly 30 years ago, more 

participants were covered by defined benefit plans than by defined 

 8

Labor officials told us that under Title I of ERISA they have authority to require the 

electronic filing of their respective components of the Form 5500. PBGC officials said they 

have similar authority under Title IV of ERISA. IRS officials also said that under IRC they 

have authority to require the electronic filing of their respective components of the Form 

5500. 

9

These trusts, accounts, and other investment arrangements include master trust 

investment accounts (MTIAs), common or collective trusts (CCTs), pooled separate 

accounts (PSAs), and 103-12 investment entities (103-12 IEs). 

10Labor regulations operationalize the deadline to the end of the seventh month after the 

close of the plan year (29 C.F.R. sec 2520.104a-5). 
Page 8 GAO-05-491 Private Pensions 

contribution plans. As shown in figure 1, in 2000, defined contribution 

plans had about 62 million participants, while defined benefit plans had 

about 41 million participants. 

Figure 1: Participants of Defined Benefit and Defined Contribution Pension Plans, 

1980-2000 

As shown in figure 2, as of 1997, assets held by defined contribution plans 

exceed those held by defined benefit plans. 

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Participants (in thousands)

Source: Private Pension Plan Bulletin: Abstract of 1999 Form 5500 Annual Reports, Labor. Data for year 2000 comes from Labor's

2000 preliminary Form 5500 research file.

Year

Defined contribution

Defined benefit
Page 9 GAO-05-491 Private Pensions 

Figure 2: Assets of Defined Benefit and Defined Contribution Pension Plans, 1980-

2000 

As shown in figure 3, as of 2000, employers sponsored over 687,000 

defined contribution plans compared with about 49,000 defined benefit 

plans. 

0

500

1,000

1,500

2,000

2,500

3,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

2004 dollars (in billions)

Source: Private Pension Plan Bulletin: Abstract of 1999 Form 5500 Annual Reports, Labor. Data for year 2000 comes from Labor's

2000 preliminary Form 5500 research file.

Year

Defined contribution

Defined benefit
Page 10 GAO-05-491 Private Pensions 

Figure 3: Defined Benefit and Defined Contribution Pension Plans, 1980-2000 

Unlike defined contribution plans, where benefits are based on investment 

returns on individual accounts, benefits provided by defined benefit 

pension plans are partially insured by PBGC. In the case of a singleemployer defined benefit plan, PBGC guarantees benefits when an 

underfunded plan terminates. For multiemployer defined benefit pension 

plans, the agency guarantees benefits when a plan becomes insolvent, 

which is when a plan’s available resources are not sufficient to pay the 

level of benefits at PBGC’s guaranteed level. PBGC’s insurance programs 

and its operations are financed through premiums paid annually by plan 

sponsors, investment returns on PBGC assets, assets acquired from 

terminated single-employer plans, and recoveries from employers 

responsible for underfunded terminated single-employer plans.11 Premium 

revenue totaled about $1.485 billion in 2004, of which $1.458 billion was 

 11PBGC receives no funds from federal tax revenues, but it is authorized under ERISA to 

borrow up to $100 million from the federal treasury if it has inadequate resources to meet 

its responsibilities. 

0

100

200

300

400

500

600

700

800

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Plans (in thousands)

Source: Private Pension Plan Bulletin: Abstract of 1999 Form 5500 Annual Reports, Labor. Data for year 2000 comes from Labor's

2000 preliminary Form 5500 research file.

Year

Defined contribution

Defined benefit
Page 11 GAO-05-491 Private Pensions 

paid into the single-employer insurance program and $27 million paid to 

the multiemployer insurance program. This is the highest premium 

revenue PBGC has ever received. In contrast, in 2004 PBGC paid $3.007 

billion in benefit payments and provided over $10 million in financial 

assistance to insolvent multiemployer pension plans. 

The termination of several large, underfunded defined benefit pension 

plans of bankrupt firms in troubled industries has worsened the singleemployer program’s net financial position. After fluctuating over the last 

decade, the single-employer insurance program now has a large and 

growing accumulated deficit and has moved from a $9.7 billion 

accumulated surplus in 2000 to a $23.3 billion accumulated deficit in 2004. 

Additionally, the agency’s multiemployer insurance program has a current 

deficit of $236 million. Because of the decline in the financial condition of 

the single-employer program, GAO placed it on its high-risk list of 

programs with significant vulnerabilities to the federal government. 

Detailed information on private pension plans is reported on the Form 

5500 and is used by Labor, IRS, and PBGC for compliance, research, and 

public disclosure purposes. Each agency uses data from Form 5500 

Reports primarily as a means to identify actual and potential violations of 

ERISA and the IRC, as well as for research and policy formulation. Other 

federal agencies, private sector entities, and researchers also use Form 

5500 data in assessing employee benefit, tax, and economic trends and 

policies. The Form 5500 is also made widely available to the general 

public.12

 12Although most of the Form 5500 information reported is made available, certain 

information, including that reported on Schedule E and Schedule SSA is not, as noted in 

table 1. 

Form 5500 Reports 

Provide Detailed 

Private Pension Plan 

Information, Which Is 

Primarily Used to 

Determine 

Compliance with 

Federal Laws 
Page 12 GAO-05-491 Private Pensions 

The Form 5500 is used to collect important information about the financial 

health and operation of private pension plans. Similar to the structure of 

an income tax form, the Form 5500 has multiple parts. As shown in table 1, 

there is the Form 5500 and its 12 schedules. The main part of the form 

provides basic information to identify the plan and type of plan. The form’s 

schedules provide more specific information about the plan, such as 

financial information, actuarial information, and insurance information. 

Table 1: Information Reported on the Form 5500 and Schedules 

Form 5500–Annual Report Identification 

• Basic plan identification information and basic information about the plan: 

Contact information is provided on the plan’s sponsor and administrator. 

Information on plan features and on the number of plan participants is reported. 

Information on the general arrangements for funding and benefits is reported on the form. 

Plan Financial Information: 

Schedule A–Insurance Information 

• Insurance information is filed for every defined benefit pension plan, defined contribution pension plan, and welfare benefit plan if 

any benefits under the plan are provided by an insurance company, insurance service, or other similar organization (such as Blue 

Cross, Blue Shield, or a health maintenance organization). This includes investments with insurance companies such as guaranteed 

investment contracts (GICs). 

Schedule C–Service Provider Information 

• Information on the service providers is for large plans mostly. 

• Plans file this if their service provider was paid $5,000 or more and/or if an accountant or actuary was terminated in the course of the 

plan year. 

Schedule D–DFE/Participating Plan Information 

• Filed when the Form 5500 is filed for a DFE or a plan that invested or participated in any DFEs, CCTs, MTIAs, 103-12 IEs, and/or 

PSAs, 

Part I provides information about plan investment or participation in these entities. 

Part II provides information about plans participating in the DFE. 

Schedule G–Financial Transaction Schedules 

• Schedule G is used to report: 

loans or fixed income obligations in default or determined to be uncollectible as of the end of the plan year, 

leases in default or classified as uncollectible, and 

nonexempt transactions. 

Schedule H–Financial Information 

• Information on the asset holdings of large plans and DFEs. 

Schedule I–Financial Information–Small Plan 

• Information on the asset holdings of small plans. 

Form 5500 Reports 

Provide Detailed 

Information about the 

Financial Condition and 

Operation of Private 

Pension Plans 
Page 13 GAO-05-491 Private Pensions 

Schedule P–Annual Return of Fiduciary 

• The statute of limitations under section 6501(a) for any trust described in section 401(a), which is exempt from tax under section 

501(a), will not start to run until this schedule is filed. The fiduciary (trustee or custodian) must sign this schedule. If there is more 

than one fiduciary, the fiduciary authorized by the section 501(a). 

Accountant’s Report 

• The accountant’s report is an audited financial statement of the plan’s operations. The report is prepared by an independent qualified 

accountant and contains the accountant’s opinion as to whether the financial statements of the plan conform to generally accepted 

accounting principles. 

Pension Benefit Information: 

Schedule B–Actuarial Information 

• This schedule contains actuarial information on the plan assets and liabilities and on the actuarial assumptions used to calculate 

these. 

• Filed for defined benefit plans subject to minimum funding standards. 

An enrolled actuary must sign Schedule B. 

A stamped or machine-produced signature is not acceptable. 

Schedule E–Employee Stock Ownership Plan (ESOP) Annual Information 

• ESOPs complete and information only goes to IRS. 

Schedule R–Retirement Plan Information 

• Schedule R reports certain information on plan distributions, and funding, and the adoption of amendments increasing the value of 

benefits in a defined benefit pension plan. 

Schedule SSA–Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits 

• Schedule SSA is used to report all participants with deferred vested benefit rights who separate from a company during the plan

year. 

• This information goes to SSA and is not made available to the general public. 

Schedule T–Qualified Pension Plan Coverage 

• Schedule T is used by certain qualified pension plans to provide information concerning the plan’s compliance with the minimum 

coverage requirements of Code section 410(b), including the number of employees as well as the number of employees who are 

excluded from the plan. 

Source: 2004 Form 5500 Annual Report and its instructions. 

Form 5500 schedules are used to collect more in-depth information, 

including data on assets, liabilities, insurance, and financial transactions. 

These schedules can be separated into two distinct groups: those that 

contain financial information on the plan and those that contain 

information on the benefits that the plan expects to pay out. For example, 

the Schedule H is a key financial schedule and includes an accountant’s 

report along with an audited financial statement of the plan’s operations. 

Information from the financial schedules helps to provide a picture of a 

plan’s financial condition, while the benefit schedules collect information 

on the contributions to and distributions made from the plan in the current 

and future years. Information collected on the benefit schedules helps to 

provide a picture of the pension plan’s benefits and benefit promises. 
Page 14 GAO-05-491 Private Pensions 

Different sizes and types of plans must meet different requirements. (See 

table 2.) For example, small defined benefit and defined contribution plans 

must file a Schedule I rather than the more detailed Schedule H required 

for a large pension plan.13 Additionally, unlike defined contribution plans, 

defined benefit plans are required to file Schedule B, including the 

signature of an Enrolled Actuary attesting to the completeness, accuracy, 

and reasonableness of the actuarial calculations, along with an attachment 

of any clarifying material not reported on the schedule itself.14

Table 2: Filing Requirements for Form 5500, Schedules, and Attachments 

Quick Reference Chart for Form 5500, Schedules, and Attachmentsa

Large Pension Plan Small Pension Plan 

Form 5500 Must complete. Must complete. 

Schedule A (Insurance 

Information) 

Must complete if plan has insurance contracts for 

benefits or investments. 

Must complete if plan has insurance contracts 

for benefits or investments. 

Schedule B (Actuarial 

Information) 

Must complete if defined benefit plan and subject to 

minimum funding standards. 

Must complete if defined benefit plan and 

subject to minimum funding standards. 

Schedule C (Service Provider 

Information) 

Must complete if a service provider was paid $5,000 

or more and/or an accountant or actuary was 

terminated. 

Not required. 

Schedule D (DFE/ Participating 

Plan Information) 

Must complete Part I if plan participated in a CCT, 

PSA, MTIA, or 103-12 IE. 

Must complete Part I if plan participated in a 

CCT, PSA, MTIA, or 103-12 IE. 

Schedule E (ESOP Annual 

Information) 

Must complete if ESOP. Must complete if ESOP. 

Schedule G (Financial 

Transaction Schedules) 

Must complete if Schedule H, line 4b, 4c, or 4d is 

“Yes.” 

Not required. 

Schedule H (Financial 

Information) 

Must complete. Not required. 

Schedule I (Financial 

Information— Small Plan) 

Not required. Must complete. 

Schedule P (Annual Return of 

Fiduciary of Employee Benefit 

Trust) 

Must file to start running of statute of limitations 

under Code section 6501(a). 

Must file to start running of statute of 

limitations under Code section 6501(a). 

 13Small pension plans are also not generally required to file Schedule C, Schedule G, and 

the Accountant’s Report. A small plan is generally a plan that has fewer than 100 

participants. 

14An Enrolled Actuary is any individual who has satisfied the standards and qualifications 

as set forth in the regulations of the Joint Board for the Enrollment of Actuaries and who 

has been approved by the Joint Board to perform actuarial services required under ERISA. 
Page 15 GAO-05-491 Private Pensions 

Quick Reference Chart for Form 5500, Schedules, and Attachmentsa

Large Pension Plan Small Pension Plan 

Schedule R (Retirement Plan 

Information) 

Must complete. Must complete. 

Schedule SSA (Annual 

Registration Statement 

Identifying Separated 

Participants With Deferred 

Vested Benefits) 

Must complete if plan had separated participants 

with deferred vested benefits to report. 

Must complete if plan had separated 

participants with deferred vested benefits to 

report. 

Schedule T (Qualified Pension 

Plan Coverage Information) 

Must complete if qualified plan unless permitted to 

rely on coverage testing information for prior year. 

Must complete if qualified plan unless 

permitted to rely on coverage testing 

information for prior year. 

Accountant’s Report Must attach. Not required unless Schedule I, line 4k, is 

checked “No.” 

Source: 2004 Instructions for Form 5500. 

a

This chart provides only general guidance. Not all rules and requirements are reflected. Refer to 

specific Form 5500 instructions for complete information on filing requirements. 

Labor, IRS, and PBGC use Form 5500 Reports as a compliance tool to 

identify actual and potential violations of ERISA and the IRC. Each agency 

has a unique statutory responsibility and uses the information on the form 

for monitoring and enforcement purposes. Agency officials said that each 

agency has developed computerized systems that analyze the reported 

information to help them ensure that plans are in compliance with 

applicable laws. 

Although Labor officials said that the most effective source of leads on 

violations of ERISA, such as delinquent participant contributions, were 

complaints from plan participants, computer searches and targeting of 

Form 5500 information on specific types of plans account for 

approximately 25 percent of case openings. Labor is currently using plan 

year 2002 and 2003 Form 5500 information for computer targeting. Labor 

officials told us that they open about 4,000 investigations into actual and 

potential ERISA violations annually. Labor officials said an early step 

when opening an investigation is to review the available Form 5500 

Reports to identify names and contact information for the plan, its 

corporate sponsor, and its plan administrator. Labor officials said they use 

Form 5500 data to enforce ERISA reporting and disclosure provisions and 

fiduciary standards. 

IRS officials told us that they use Form 5500 data to examine plan financial 

transactions and to target plans for examination. Pension law provides 

significant tax benefits for sponsors of certain retirement plans and the 

Form 5500 Reports 

Are Used for Monitoring 

Compliance and 

Enforcement 
Page 16 GAO-05-491 Private Pensions 

employees that participate in them. IRS enforces certain minimum funding 

requirements of ERISA and the IRC. IRS officials said the purpose of IRS 

examinations is to ensure plan sponsors are making contributions to the 

plan as required, the assets truly exist to satisfy the liabilities and are 

classified properly, and that plans are operating in accordance with plan 

design. IRS can levy penalties, taxes, and interest charges as well as 

completely disqualify a tax-exempt plan from tax-exempt status if major 

violations are found. 

In fiscal year 2004, IRS examined more than 10,700 plans and 91 percent of 

these examinations were based solely on Form 5500 information, and an 

additional 5 percent were based in part on Form 5500 information. IRS 

uses its Returns and Inventory Classification System (RICS) to select plans 

for review based on Form 5500 Reports. For example, after IRS had 

determined that a pension practitioner was involved with tax-abusive 

schemes, it used available contact information listed on the Form 5500 to 

create a list of over 400 sponsors who had filed their Form 5500 Reports 

using the address of the practitioner who allegedly designed these 

schemes. 

PBGC uses Form 5500 information to monitor both single-employer and 

multiemployer defined benefit pension plan activities, focusing on assets, 

liabilities, number of participants, and funding levels. Form 5500 

information is also used to forecast PBGC’s potential liabilities. PBGC’s 

data on multiemployer plans currently come only from Form 5500 Reports, 

while single-employer plan data are supplemented with information 

obtained from other filings and submissions with the government and 

from corporate annual returns.15 PBGC officials said the agency is 

particularly interested in single-employer and multiemployer plans with 

financial problems. For both types of plans, PBGC officials said they 

maintain a database of financial information about such plans drawn from 

Form 5500 Reports, premium filings, and other data in order to determine 

which plans may be at risk of requiring PBGC financial assistance. 

PBGC officials also said they use the Form 5500 for participant notice and 

PBGC insurance premium compliance. For example, PBGC reviews Form 

5500 filings to ensure that plan sponsors of underfunded plans report 

 15Corporate annual returns mentioned here refer to Securities and Exchange Commission 

(SEC) 10-K filings. The federal securities laws require certain publicly traded companies to 

disclose financial information on an ongoing basis. Domestic issuers (other than small 

business issuers) must submit such reports annually to the SEC on Form 10-K. 
Page 17 GAO-05-491 Private Pensions 

sending required participant notices to plan participants notifying them of 

the plan’s funding status and the limits of PBGC’s guarantee benefits. If a 

participant notice is not issued as required, agency officials said they may 

assess penalties. PBGC officials also said they use Form 5500 information 

on plan type and level of underfunding to help ensure that plans are 

making the appropriate premium payments (which vary by type of plan 

and the extent of underfunding). They also said the agency has an 

“intercept program” arrangement with the EFAST processor. Through this 

program, PBGC has identified over 2,000 plans it is most interested in and 

has made arrangements for copies of these Form 5500 filings to be mailed 

to PBGC before being processed. 

Form 5500 information is also used for research and statistical purposes. 

Labor and PBGC officials told us that Form 5500 information is an integral 

part of their policy research. Labor officials said that EBSA’s Office of 

Policy and Research (OPR) uses Form 5500 information to assist in 

developing regulations and to prepare its Private Pension Plan Bulletin. 

OPR also uses Form 5500 information to develop aggregate pension 

statistics and conduct economic research on relevant topics. OPR officials 

said they plan and administer an employee benefits research and 

economic analysis program to support EBSA policy and program 

priorities, respond to requests for data and findings, and provide technical 

assistance to EBSA offices, other Labor agencies, and external groups. 

Officials from PBGC’s Policy, Research, and Analysis Department said 

they use Form 5500 data to develop policies for PBGC’s insurance 

programs and conduct related research and modeling. 

SSA is also a direct recipient of Form 5500 Reports. SSA officials said they 

receive information on name and address changes for plan administrators 

and information on mergers from pension plans. Plans file the Schedule 

SSA if they have vested participants who separated from the plan during 

the prior reporting period. SSA officials said they use the data to notify 

those participants or their survivors who apply for Social Security that 

they may have benefits from one or more private pension plans. 

The Form 5500 is also a source of information that is used by other federal 

agencies. In our discussions with federal agency officials, we found they 

use Form 5500 information for government research and preparing 

government statistics. For example, some federal agencies use the 

information in assessing employee benefits and taxes, determining 

economic trends, and evaluating policies. As shown in table 3, different 

federal agencies use Form 5500 information for different purposes. 

Federal Agencies and 

Others Use Form 5500 

Information for Research 

and Statistical Purposes 
Page 18 GAO-05-491 Private Pensions 

Table 3: Examples of Federal Agencies That Use Form 5500 Information 

Bureau of Economic Analysis (Department of Commerce): 

• Form 5500 data is incorporated into the compensation of employees segment of the National Income and Product Accounts.a

Census Bureau (Department of Commerce): 

• Matches Form 5500 data to the Census Bureau’s Business Register. 

• Is exploring how the Form 5500 can improve coverage estimates and reconcile inconsistencies in the current data collection (the

Current Population Survey and the Survey of Income and Program Participation).

Congressional Budget Office: 

• Uses Form 5500 information to evaluate the financial condition of PBGC. 

• Uses information to assess pension reform issues. 

Congressional Research Service: 

• Uses Form 5500 information to conduct pension research. 

• Answer questions from members of the Congress regarding private pension plans. 

Employee Benefits Security Administration (Department of Labor): 

• Uses Form 5500 information for enforcing ERISA pension requirements. 

• Uses Form 5500 information for research and policy analysis. 

• Discloses Form 5500 information to the public. 

• Publishes aggregate summary information in its annual Private Pension Plan Bulletin. 

Federal Reserve Board: 

• Primarily uses Form 5500 data for the Flow of Funds financial sectors.b 

• Form 5500 data is used as a benchmark for estimating current holdings of pension plans. 

• Form 5500 data is also used for other research purposes. 

Government Accountability Office: 

• Uses Form 5500 data for pension research. 

• Conducts studies and prepares testimonies for the Congress. 

Internal Revenue Service (Department of the Treasury): 

• Enforce ERISA and IRC pension requirements. 

• Conducts studies to identify and monitor pension plan noncompliance. 

Joint Committee on Taxation: 

• Uses Form 5500 data in calculating revenue estimates. 

Office of Tax Policy (U.S. Department of the Treasury): 

• Uses Form 5500 data in calculating revenue.

Pension Benefit Guaranty Corporation: 

• Uses Form 5500 information for enforcing ERISA pension requirements. 

• Uses Form 5500 information for research, and policy analysis. 

• Uses Form 5500 information to monitor single-employer and multiemployer plan activities. 

• Uses Form 5500 information for its Pension Insurance Modeling System and Multiemployer Evaluation System. 

• Annually prepares the Pension Insurance Data Book which reports summary information on pension plans and PBGC finances.
Page 19 GAO-05-491 Private Pensions 

Social Security Administration: 

• Uses Form 5500 and Schedule SSA information to comply with ERISA and Social Security Act requirements. 

• Uses information from the Schedule SSA to notify certain individuals that they may be eligible for deferred vested benefits from 

private pension plans.

Source: GAO analysis. 

a

The National Income and Product Accounts provides an aggregated view of the final uses of the 

nation’s output, and the income derived from its production; two of its most widely known measures 

are gross domestic product (GDP) and gross domestic income (GDI). 

b

The flow of funds accounts measure financial flows across sectors of the economy, tracking funds as 

they move from those sectors that serve as sources of capital, through intermediaries (such as banks, 

mutual funds, and pension funds), to sectors that use the capital to acquire physical and financial 

assets. Federal Reserve Board officials said they estimate pension plan assets using the latest 

available information from EBSA’s Office of Policy Research and are currently using 1999 Form 5500 

information. 

Finally, others outside of the federal government use Form 5500 

information. Pension researchers told us they use Form 5500 information 

to determine employer contributions to defined benefit plans, employer 

pension costs for defined contribution plans, and data on the relationship 

between collective bargaining and pensions. Additionally, researchers said 

they have used information from the Form 5500 to determine the extent of 

cash balance defined benefit plans. Benefit consulting firms also use Form 

5500 information. Consultants from one firm told us they use Form 5500 

information for a variety of client-sponsored projects such as studying the 

time it takes an active participant to become vested and comparing singleemployer with multiemployer pension plans. Others said that they 

repackage and sell information from Labor’s Form 5500 data after editing 

it and verifying contact information for large plans. 

The Form 5500 is also an important public disclosure document. The 

public disclosure of the form is a Labor function required by ERISA. 

According to Labor officials, the form is the only source of detailed 

financial information available to plan participants and beneficiaries, who 

upon written request must be furnished a copy of the plan’s latest Form 

5500 by the plan administrator. Moreover, the form serves as a basis for 

the Summary Annual Report (SAR), which plan administrators are 

generally required to furnish to each participant and beneficiary annually. 

Labor also maintains a public disclosure room so that Form 5500 Reports 

and related plan information are available to public agencies, private 

organizations and individuals for review. Labor officials said in fiscal year 

2004, EBSA’s Public Disclosure Office received about 1,800 requests for 

Form 5500 Reports and provided about 5,200 documents in response to 

Form 5500 Reports Are 

Made Available to the 

Public 
Page 20 GAO-05-491 Private Pensions 

these requests. Labor officials said making the form publicly available is 

intended to serve as a deterrent to non-compliance with the statutory 

duties imposed on plan fiduciaries. EBSA also makes its Form 5500 

research file available in electronic format to individuals and groups for 

research purposes. In addition, separate from the research file, an 

electronic database of all available publicly disclosable filings is made 

available in response to Freedom of Information Act requests. Information 

from Form 5500 Reports is also made available through private parties. 

For example, electronic facsimiles of publicly available Form 5500 filings 

can be obtained free of charge at FreeErisa.com. 

Statutory reporting requirements, EFAST processing issues, and current 

Labor practices delay the release of Form 5500 information for up to 3 

years in some cases. Current statutory requirements allow plan sponsors 

up to 285 days following the end of their plan year to file their Form 5500 

Reports. Once the reports are filed, processing of the reports is slowed by 

some of EFAST’s procedures. Labor’s practice of not releasing the 

research file–Form 5500 information in its most practical form–until it has 

processed all forms from a plan year results in further delays. Agency 

officials told us that the timeliness of Form 5500 Reports affects their use 

of the information. 

The length of time plan sponsors have to file their Form 5500 Reports is 

determined by the statutory reporting requirements. Under ERISA, plan 

sponsors have a normal deadline of 210 days after the end of the plan year 

to file and may then apply to IRS for an annual automatic one-time 2 1⁄2 

month extension. Thus, plan sponsors can take up to 285 days from the 

end of the plan year to file their Form 5500 reports. For example, as shown 

in figure 4, for a calendar year plan that ends on December 31, a plan 

sponsor has until July 31 to file the Form 5500. If the plan sponsor requests 

an extension, the new deadline would be October 15. 

Statutory Reporting 

Requirements, 

Current Processing 

Methods, and Labor 

Practices Delay the 

Release of Form 5500 

Information 

Current Statutory 

Reporting Requirements 

Limit the Timeliness of 

Form 5500 Information 
Page 21 GAO-05-491 Private Pensions 

Figure 4: Example of Statutory Deadlines to File Form 5500 for Calendar Year Plan 

Note: Labor regulations operationalize the deadline to the end of the seventh month after the close of 

the plan year. 

An additional 45-day extension from the normal statutory deadline is also 

automatically given to corporations receiving an extension on their federal 

income taxes.16 However, an extension granted by using this automatic 

extension procedure cannot be extended further by using the one-time 2 1⁄2 

month extension. Labor, IRS, and PBGC may also grant special extensions 

of time, beyond the 285 day extended deadline, for events such as 

presidentially declared disasters or for service in, or in support of, the 

armed forces of the United States in a combat zone.

The current statutory filing requirements are also intertwined with other 

statutory deadlines relating to private pension plans (See fig. 5). For 

example, under ERISA, certain providers, such as insurance companies 

 16This extension is granted as long as the following three conditions are met: (1) the plan 

year and the employer’s tax year are the same; (2) the employer has been granted an 

extension of time to file its federal income tax return to a later date than the normal due 

date for filing the Form 5500; and (3) a copy of the application for extension of time to file 

the federal income tax return is attached to the Form 5500. 

December 31

July 31

September 15

October 15

End of plan year (calendar year plan).

Normal statutory deadline to file (210 days after plan year end).

Automatic extended deadline granted to corporations also 

receiving an extension on corporate income tax returns 

(45 days after the normal statutory deadline). 

Extended deadline: One-time 2 1/2 month extension granted 

through IRS (2 1/2 months after normal statutory deadline). 

Source: GAO analysis of Form 5500 filing deadlines.
Page 22 GAO-05-491 Private Pensions 

and financial institutions, have 120 days after the plan year to provide 

information to the plan administrator.17 Then, under IRC and ERISA, 

defined benefit plans have up to 8 1⁄2 months after the plan year end to 

make contributions for minimum funding purposes.18 Finally, under 

Treasury regulations, a plan has up to 9 1⁄2 months after the end of the plan 

year to correct any coverage or nondiscrimination violations,19 which 

enables any corrections to be made and timely reflected on Schedule T of 

Form 5500. 

Figure 5: Timeline of Statutory Deadlines for a Calendar Year Plan 

Note: Labor regulations operationalize the deadline to the end of the seventh month after the close of 

the plan year. 

 17ERISA § 103(a)(2). 

18IRC § 412(c)(10). 

1926 C.F.R. § 1.401(a)(4)-11(g) 

December 31

April 30

July 31

September 15

October 15

End of plan year (calendar year plan).

 Under ERISA, insurance companies and financial institutions

 must provide information required for the Form 5500 to 

 plan administrators by this date (120 days after plan year end).

Normal statutory deadline to file (210 days after plan year end).

Final contributions due: Under ERISA and IRC, defined benefit

plans have up to 8 1/2 months to make final contributions for 

minimum funding purposes. 

Last day to correct any coverage or nondiscrimination violations

under Treasury regulations (9 1/2 months after plan year end). 

Source: GAO analysis of ERISA, IRC, and Treasury requirements.
Page 23 GAO-05-491 Private Pensions 

Service providers and plan sponsor representatives said that the 210 day 

time frame with extensions is necessary, given the amount of coordination 

with other parties that is needed to prepare the form and the obstacles 

that exist. Plan sponsors are ultimately responsible for filing the Form 

5500. However, industry association representatives told us that many plan 

sponsors are relying heavily on service providers to help them prepare the 

form. In addition, there are numerous parties that must provide 

information to the plan sponsor or service provider in order to complete 

the Form 5500. For example:

• Financial institutions provide information on plan assets held in their 

custody. 

• Insurance companies provide information about any benefits provided 

through or investments made with them, including commissions and 

fees paid by the plan sponsor for the year. 

• Actuaries are responsible for preparing the Schedule B and attesting 

that the information and any assumptions being presented are both 

reasonable and represent the best estimates of anticipated experience 

under the plan. 

• Auditors are required to review plan financial statements as well as any 

books or records of the plan that they deem necessary. This review 

enables them to form an opinion as to whether the financial statements 

and the schedules provided as part of the Form 5500 are presented 

fairly according to generally accepted accounting principles. They also 

provide an opinion as to whether the schedules present the information 

about the plan fairly when examined in conjunction with the financial 

statements as a whole. 

Figure 6 shows an example of the coordination and information flow that 

must occur for service providers or plan sponsors to obtain information 

necessary to complete the Form 5500. 
Page 24 GAO-05-491 Private Pensions 

Figure 6: Example of Coordination and Information Flow Required for Form 5500 Preparation 

Service

Provider

(On behalf

of plan

sponsor)

1.

2.

3.

4.

5.

6.

7.

 Plan sponsor

Insurance 

companies

Financial 

institutions

and trustees

Actuary

Auditor

 Plan sponsor provides 

 information to the service 

 provider, such as plan

 census information.

Insurance companies 

and financial institutions 

provide information for 

Schedule A, C, and H/I to 

the service providers.

Actuary receives information such

as plan census information or asset

valuations from the service provider.

The actuary may also get 

information from the plan sponsor. 

Actuary prepares Schedule B and 

actuarial report and sends them to 

the service provider.

Service provider compiles Form 

5500, sending completed package 

to the auditor, who can conduct the 

plan audit.

Depending on what the auditor 

finds, the form may have to go 

back to the plan sponsor, actuary,

service provider, or insurance 

company for clarification or added

information.

 Once the audit is completed, it is 

 sent back to the service provider.

Source: GAO analysis of ERISA requirements and testimonial evidence from service providers, actuaries, insurance companies, financial

institutions, and accountants. 

8. The Form 5500 package is signed

 by the plan sponsor and submitted 

 to EFAST by either the plan 

 sponsor or service provider.

 
Page 25 GAO-05-491 Private Pensions 

Parties involved in filling out the Form 5500 told us they face obstacles 

that limit the timeliness of form preparation. For example, some officials 

said that plan sponsors are busy preparing their corporate taxes, closing 

their books for the year end, and preparing appropriate SEC filings during 

the first quarter of the year and that these things cause them to be unable 

to provide information for Form 5500 preparation until March or April at 

the earliest. 

Service providers, who often prepare the Form 5500 on behalf of plan 

sponsors, told us that gathering information from many different parties 

creates numerous obstacles that can delay preparation. Service providers 

said that it can be difficult to receive timely information from insurance 

companies, which is needed to complete the Schedule A. Service providers 

also said that receiving complete census data from plan sponsors can be 

difficult and often leads to delays in form preparation because of such 

problems as merging information from different databases, dealing with 

non-computerized retiree data, and identifying vested participants who 

have left the company. The data collection and the analysis of census data 

are further complicated when companies go through mergers, 

acquisitions, or divestitures, which can result in further delays. In addition, 

service providers said that many plan sponsors have outsourced their 

payroll function, which means that they have to get data from another 

party, which adds additional time. 

Actuaries said they face certain obstacles that can affect the timeliness of 

Schedule B preparation for defined benefit plans. These officials said the 

biggest delay is due to funding rules that allow plan sponsors to make 

contributions up to 8 1⁄2 months following the close of a plan year. 

Actuaries said they need to know all of the contributions that have been 

made in order to certify Schedule B of the form. In addition, actuaries said 

they must wait for plan sponsors to give them information such as asset 

valuations, which can take a long time to prepare; as a result, they are 

generally unable to begin preparing the Schedule B until May or June at 

the earliest for calendar year plans. In general, actuaries said that once 

they have all the information they need, it typically takes them up to 2 

months to complete the Schedule B. 

Audits are typically the last step in the preparation of the Form 5500 and 

can hold up submission of the form in many cases.20 Auditors said that 

 20Most pension plans with 100 or more participants have an audit requirement for the Form 

5500. 
Page 26 GAO-05-491 Private Pensions 

scheduling a pension plan audit is often delayed because auditors are busy 

performing corporate year-end audit work and preparing corporate tax 

filings, and therefore they lack the time and resources to begin auditing 

pension plans until after April at the earliest. Officials from the larger 

auditing firms said that once they start working on pension plan audits, 

corporate work still takes precedence and if issues relating to a corporate 

audit arise, the pension plan audit will be put on hold. In addition, 

depending on any issues uncovered during the pension plan audit, auditors 

said they may need to go back to the plan sponsors, service providers, 

actuaries, or even the insurance companies and financial institutions to 

seek clarification or additional information. Auditors also said that this 

back and forth can be very time consuming, and sometimes small issues 

can hold up an entire audit. Once the audit is completed, it is typically sent 

back to the service provider, and then the completed Form 5500 Report is 

signed by the plan sponsor and submitted to EFAST for processing. 

Figure 7 shows an example of the preparation timeline for all the parties 

involved in providing information to the service providers in order to 

prepare Form 5500 Reports, as well as the other requirements that the 

various parties must meet during this time frame. 
Page 27 GAO-05-491 Private Pensions 

Figure 7: Example of a Timeline of Form 5500 Preparation for a Calendar Year Defined Benefit Plan 

December 31

March 15

March 31

April 30

June 29

September 15

October 15

2000

2001

 December-January: Service

 providers send 

 out packets requesting 

 information required for Form 5500

12-31-2000 End of 2000 Plan Year (calendar year plan)

Corporate tax deadline

 (plan sponsor)

10-K report due to SEC (plan sponsor)

 Insurance companies and financial 

 institutions must get information for 

 the Form 5500 to the plan administrator

11-K due to SEC

Final 2000 contribution due

Plan sponsor files Form 5500-extended 

deadline: automatic extension granted 

for filing of Form 5500

March-April: Service 

providers get information 

back from plan sponsors

 May-October: Actuaries

 perform valuations and 

June-October: prepare Schedule B

Auditors conduct 

plan audit 

Source: GAO analysis of ERISA, IRC, and SEC requirements and testimony from service providers, auditors, actuaries, insurance companies,

financial institutions, and accountants.

Preparation Time: December 31, 2000 - October 15, 2001 

January-April:

Auditors conducting 

year end financial 

statement audits and 

assisting in corporate 

tax preparation 
Page 28 GAO-05-491 Private Pensions 

All of the service providers, actuaries, and auditors we talked to said that 

given all the various commitments of the parties involved in preparing the 

Form 5500, it would be very difficult to shorten the Form 5500 filing 

deadline. Even given the current time frame, filings can get held up past 

the deadline and sponsors may be forced to file late. For example, if the 

actuarial report is not prepared in time to finish the plan audit by the 

October 15 deadline, a plan will have no choice but to file late or file an 

incomplete filing. According to statistics provided by Labor, 11 percent of 

all filers in 2001 filed late. 

The submission of numerous paper filings and certain EFAST processes 

limit the timeliness of Form 5500 report processing. Labor officials 

reported that the EFAST system processes approximately 25 million paper 

pages annually and that 98 percent of filers used paper forms in 2001, the 

most recent year for which data are available; this figure is consistent with 

prior years. EFAST officials said that under the current system, all filings 

are sent by the filers to a central processing facility in Lawrence, Kansas, 

operated by an outside contractor. Paper filings, once received and 

properly sorted, are scanned using advanced data capture software,21 and 

in some cases must be entered manually if the software is unable to 

process the form. After the forms are processed and scanned, they are run 

through edit checks and any errors are corrected. When the processing of 

the form is considered final, meaning any necessary corrections have been 

made, the information from the form is posted to the EFAST database. 

From there the information is then distributed to Labor, IRS, and PBGC on 

digital media. According to Labor officials, paper filings take more than 

three times as long as electronic filings to process and have nearly twice 

as many errors. As shown in figure 8, the abundance of paper filings 

results in long processing times, which delay the availability of the forms 

to the agencies. 

 21EFAST uses optical character recognition (OCR) software and 2D bar code technology to 

capture data from paper Form 5500 filings. 

Paper Filings and EFAST 

Processes Further Affect 

the Timeliness of Form 

5500 Information 
Page 29 GAO-05-491 Private Pensions 

Figure 8: Form 5500 Reports 

Source: Department of Labor.
Page 30 GAO-05-491 Private Pensions 

According to Labor officials and the ERISA Advisory Council’s22 working 

paper on electronic reporting, the electronic filing option of the current 

EFAST system has been underutilized by plan sponsors largely because of 

the fact that electronic filing is entirely voluntary.23 In addition, service 

providers told us there are some obstacles to electronic filing. First, they 

said the current process of obtaining an electronic signature and personal 

identification number (PIN) is burdensome and time consuming. For 

example, in order to receive a PIN, a plan sponsor must file a paper 

application with Labor, a process that takes from 3 to 4 weeks. Second, 

plan sponsors also reported that currently there is little economic benefit 

to filing electronically because purchasing the software needed for 

electronic filing can be more costly than generating paper filings, with no 

corresponding benefit. Third parties such as actuaries and accountants 

must sign certain portions of the Form 5500 filings, which complicates the 

electronic filing process. These officials said they want to ensure that any 

information developed by them and attributed to them is not changed or 

altered after it leaves their control. Labor and others have made attempts 

to address these issues. In 2002, the ERISA Advisory Council issued a 

report recommending the use of Web-based technologies and requiring 

that Form 5500 Reports be filed electronically.24

Resolving errors on Form 5500 filings, another paper-based process, can 

add up to 120 days to the processing of a form. EFAST officials said that 

whether a form is submitted in a paper format or electronically, the 

process for resolving errors or problems is paper based. We found that the 

EFAST system locates errors only after a form has been processed and 

seeks to resolve the error by mailing letters to plan sponsors. Labor will 

send up to two letters to receive clarification, providing plan sponsors up 

to 30 days to respond to each letter. In addition, Labor officials estimate 

 22Section 512 of ERISA provides for the establishment of an Advisory Council on Employee 

Welfare and Pension Benefit Plans. The council consists of 15 members appointed by the 

Secretary of Labor: three representatives of employee organizations (at least one of whom 

represents an organization whose members are participants in a multiemployer plan), three 

representatives of employers (at least one of whom represents employers maintaining or 

contributing to multiemployer plans); one representative each from the fields of insurance, 

corporate trust, actuarial counseling, investment counseling, investment management, and 

accounting; and three members of the general public. 

23“Report of the Working Group on Electronic Reporting,” ERISA Advisory Council, 

November 8, 2002. 

24“Report of the Working Group on Electronic Reporting,” ERISA Advisory Council, 

November 8, 2002. 
Page 31 GAO-05-491 Private Pensions 

that it takes roughly 30 days for mailing and processing, thereby adding up 

to 60 days in total for each letter to the overall processing time of Form 

5500 Reports. Once two letters are sent, a filing is marked complete 

whether a resolution was achieved or not. As shown in figure 9, a Form 

5500 Report can be initially processed by January 15, but if there are 

errors it may not be completed until May 14. 
Page 32 GAO-05-491 Private Pensions 

Figure 9: Example of a Form 5500 Being Processed through EFAST with Errors 

Note: The processing cycle remains open for 2 years to account for all filings, including non-calendar 

year filings that may be due up to a year after the filing used in the above example. 

EFAST processing cycle plan year 2000: 7/1/2001-6/30/2003

2001

2002

2003

July 1

October 15

January 15

March 15

May 14

June 30

EFAST processing of 2000 plan year forms begins 

(as submitted).

Any forms submitted prior to this date are 

held until now.

Extended deadline for calendar year plan Form 5500 filings.

 The form is submitted, marking the beginning of processing. 

 The Form 5500 Report is initially processed by January 15. 

 If errors are found, a letter is sent out to the filer seeking clarification.

A filer response is received and processed by this date. If the 

response is insufficient to correct the error, a second letter 

is sent to the filer. 

 The second filer response is received and processed by this date. 

 The filing is marked as complete, regardless of whether the error

 has been resolved. 

EFAST processing of 2000 plan year forms officially closes.

Source: GAO analysis of EFAST procedures manual.
Page 33 GAO-05-491 Private Pensions 

Labor officials said they initiated EFAST with the hope of achieving 

certain advantages provided by an electronic system, including better 

dissemination of information to the public, better access to data for 

regulatory agencies, and availability of more current data for participants 

and beneficiaries. Currently, Labor is looking into a new system to replace 

EFAST when its contract ends. The new system would build on the gains 

achieved through EFAST, utilizing Web-based technologies and mandatory 

electronic filing, as recommended by the 2002 ERISA Advisory Council 

Working Group report on electronic filing. 

We found that currently Labor waits until EFAST has processed all filings 

for a plan year before finalizing work on the Form 5500 research file—

Form 5500 information in its most practical form for producing aggregate 

statistics and conducting policy research. Labor officials said that waiting 

for all processing to be completed allows Labor to be more accurate and 

not be forced to use estimates for information in the research file. Under 

EFAST, the processing cycle for a plan year lasts 2 years to account for all 

types of filings, including non-calendar year plan filings. Since noncalendar year plan filings can be due up to a year later than calendar year 

plan filings,25 the research file is often not available to end users until 

about 3 years after the end of the plan year. For example, in plan year 

2001, 74 percent of all filings were calendar year plans, and for those plans 

that were filed on time, processing under the EFAST contract standards 

was to be completed by May 13, 2003. Labor began work on the 2001 

research file in mid-2004. The long delay in releasing the research file 

results in a lack of timely information on the current state of pension plans 

for policy makers and researchers. 

The need for adjustments to the EFAST system and the switch to an 

outside contractor, Actuarial Research Corporation (ARC), to prepare the 

research file have also delayed the release of the research file. Officials 

from ARC told us that part of the recent delays in releasing the 1999 Form 

5500 research file is that the switch to EFAST in 1998 resulted in changes 

to the way that the data are collected and therefore new processes were 

required to develop the research file. In addition, Labor has included new 

 25For example, under the current deadlines for plan year 2001, a calendar year filer must 

file its Form 5500 by July 31, 2002. However, a non-calendar year plan, for example, that 

has a plan year that runs from October 1, 2001 to September 30, 2002, would have until 

April 30, 2003 to file a Form 5500, or even longer if the filer receives available deadline 

extensions. 

Labor’s Need for Complete 

and Accurate Filing 

Records for a Plan Year 

Also Delays the Release of 

Certain Form 5500 

Information 
Page 34 GAO-05-491 Private Pensions 

variables that are not in the raw dataset, adding more time. Plan year 2000 

marks the first year that the research file will be produced by ARC; 

previously the file was produced within Labor. Because of the long delay 

in releasing the 1999 research file, ARC has gotten off to a delayed start on 

subsequent years. ARC officials said that they are currently working on the 

2000, 2001, and 2002 research files. ARC officials also said that there is a 

significant learning curve associated with preparing the research file, and 

therefore they expect the time frame needed to prepare the research file to 

be shorter in the future. They estimated that once the processes for 

developing the file are in place, it should take roughly 4 months to produce 

a preliminary version. As shown in figure 10, they began work on the 2000 

research file in early 2004 and expect to release it in the summer of 2005. 

Figure 10: Timeline for the Preparation of the 2000 Form 5500 Research File 

Although Labor, IRS and, PBGC have access to the Form 5500 information 

sooner than other federal agencies and the general public, the agencies are 

affected by the long processing times for paper filings and EFAST’s paperbased correction process. Each agency receives processed Form 5500 

information on individual filings on a regular basis once a form is 

completely processed, which means that any necessary corrections have 

been made. As stipulated in the EFAST contract, IRS and PBGC receive 

weekly updates of processed Form 5500 information, while Labor and SSA 

receive updated information on a monthly basis. These agencies are also 

The Timeliness of Form 

5500 Reports Affects 

Federal Agencies’ Use of 

the Information 

2004

2003

June 1 EFAST processing of 2000 plan year forms officially closes.

Source: GAO analysis of testimonial evidence from ARC. 

2005

In early 2004, ARC began working on 2000 plan year 

data for the Form 5500 research file. A preliminary Form 5500

research file was completed and made available later that year. 

ARC expects to have the 2000 Form 5500 research file finalized

and detailed statistics published by the summer of 2005. 
Page 35 GAO-05-491 Private Pensions 

able to view images of the forms immediately after being scanned by 

EFAST. However, agency officials told us that as with the release of the 

Form 5500 research file, they still have to wait for a sufficiently complete 

universe of plan filings from any given plan year to be processed in order 

to begin their compliance targeting programs. 

Federal agency officials said that old Form 5500 information may paint a 

distorted picture of the current financial condition of defined benefit 

pension plans. The value of plan assets can change significantly over a 

period of time, and the value of plan liabilities can also change because of 

changes in interest rates, plan amendments, layoffs, early retirements, and 

other factors. For plans that experience a rapid deterioration in their 

financial condition, the funding measures may not reveal the true extent of 

a plan’s financial distress to relevant federal agencies and plan 

participants. 

Federal agency officials also said that it would be useful to have certain 

Form 5500 information reported prior to the lengthy Form 5500 filing 

deadline. For example, Labor, IRS and PBGC officials told us that Form 

5500 Schedule B information, including information about a defined 

benefit pension plan’s funding status, is outdated by the time it is filed. As 

a result, these agencies are not notified of a plan’s funding status until 

almost 2 years after the actual valuation date. These officials said this 

makes the Form 5500 an unreliable tool for determining a plan’s current 

funding financial condition. They also told us other information could be 

reported earlier than the filing deadline, including Schedule H and I 

information, which would provide them with more timely plan financial 

information, including plan assets and liabilities. 

Labor, IRS, and PBGC officials told us that because of the timeliness of the 

information received, their ability to carry out various statutory 

responsibilities is hampered. Labor officials said that, in some cases, 

untimely Form 5500 Reports affects their ability to identify financially 

troubled plans whose sponsors may be on the verge of going out of 

business and abandoning their pension plans, because these plans may no 

longer exist by the time that Labor receives the processed filing or is able 

to determine that no Form 5500 was filed by those sponsors. IRS officials 

said the timeliness of Form 5500 Reports also affects their enforcement 

efforts, because the IRS has a 3 year statute of limitations. These officials 

said that working with older Form 5500 information raises the time and 

cost required to complete an investigation because retrieving the required 

information becomes more difficult with each passing year. Finally, the 

timeliness of Form 5500 reporting affects PBGC’s ability to monitor 
Page 36 GAO-05-491 Private Pensions 

multiemployer plans. PBGC officials said that it is a challenge to get 

current information on the stability of defined benefit pension plans, 

especially multiemployer plans, because of the unavailability of current 

Form 5500 data. Multiemployer plan data come only from Form 5500 

Reports and are much less current and complete than single-employer 

plan data–such data are generally 2 to 3 years older. According to PBGC 

officials, a major reason for this is that PBGC can identify the corporate 

sponsor of a single-employer plan from the Form 5500 and is often able to 

obtain financial information from the sponsor’s corporate 10-K filing. They 

said obtaining such data is not possible for multiemployer plans because 

participating corporate employers cannot be identified from Form 5500 

information. 

Officials from other federal agencies that use Form 5500 information also 

told us that the information is not current, a fact that affects their ability to 

use the information to conduct program activities, inform policy makers, 

and evaluate the condition of the private pension plan universe. Some 

federal agency officials told us that they would develop modeling 

programs to explore more uses of Form 5500 information if it were 

available in a timelier manner. 

Labor, IRS, and PBGC have taken steps to improve the content of the 

Form 5500, including reviewing the form annually and revising the content 

as needed to ensure that the form is collecting all required information 

while not overburdening plan sponsors. Despite the content changes that 

have been made, the Form 5500, in its current form, lacks key information 

that could better assist Labor, IRS, and PBGC in tracking and identifying 

plans from year to year and monitoring multiemployer plans. In addition, 

federal agency officials and researchers that use Form 5500 information 

said the form has not kept pace with changes in the private pension 

universe. Although federal agency officials and others said the form lacks 

certain information, pension practitioners and service providers told us 

that it could be further streamlined by removing certain items and 

consolidating schedules. 

Labor, IRS, and PBGC annually review and revise Form 5500 content as 

needed to ensure that the form is collecting all information required under 

ERISA. These agencies conduct a review of the Form 5500 as part of the 

process by which they publish updated versions of the form and its 

instructions on an annual basis. The agencies receive public input 

throughout the course of the year from interested parties, such as plan 

sponsors and service providers, either asking questions about the form or 

Despite Efforts to 

Improve Its Content, 

the Form 5500 Lacks 

Key Information 

Federal Agencies Have 

Taken Steps to Improve 

the Content of Form 5500 

Information 
Page 37 GAO-05-491 Private Pensions 

suggesting areas where the instructions can be improved. Federal agency 

officials told us that these questions and comments are taken into account 

as part of the annual process of reviewing the Form 5500. 

Agency officials said the process of revising the form, which can include 

adding or removing items, can be triggered by a number of events, such as 

a statutory requirement to change the form or a requirement for agencies 

to collect certain information. Revisions to the form can also result from 

recommendations from entities such as the ERISA Advisory Council. After 

the triggering event, if the respective agency deems that a change is 

appropriate, it starts the process of developing the proposed change. The 

proposed change then goes through an approval, public comment, and 

clearance process at the agency level and the Office of Management and 

Budget (OMB). The process provides the general public and federal 

agencies an opportunity to comment on the proposed changes as well as 

helping to ensure, among other things, that any additional information can 

be reported in a way that minimizes respondent reporting burden (time 

and financial resources). The process to change the Form 5500 can take 

anywhere from 1 to 2 years, depending on the nature of the revisions. 

Efforts to minimize plan sponsors’ reporting burden may limit the 

collection of Form 5500 information. Legislation requires OMB to review 

forms before they are used to collect data. The Paperwork Reduction Act 

of 1995 (Pub. L. No. 104-13) and similar previous legislation26 are designed 

to minimize the paperwork burden on the public while at the same time 

recognizing the importance of information to the successful completion of 

agency missions. The act requires OMB to approve all existing and new 

collections of information by federal agencies. In approving agency 

collection efforts, OMB must weigh the burden to the public against the 

practical utility of the information to the agency. Revisions to the Form 

5500 can also include eliminating duplicate or obsolete items. Agency 

officials said that they were reluctant to propose additional Form 5500 

data collection unless they could clearly establish that the benefit 

outweighed the perceived burden. They also said that efforts to reduce 

existing data collection requirements sometimes result in a loss of 

information. 

 26Previous legislation includes the Paperwork Reduction Act of 1980 (Pub. L. No. 96-511) 

and the Paperwork Reduction Reauthorization Act of 1986 (Pub. L. No. 99-500). 
Page 38 GAO-05-491 Private Pensions 

Over the years Labor, IRS, and PBGC have made revisions to the Form 

5500. The last major revision occurred in 1999, as part of a multiyear 

project, and followed Labor, IRS, and PBGC’s evaluation of public 

comments on their 1997 proposal from employer groups, employee 

representatives, financial institutions, service providers, and others.27 This 

resulted in these three agencies, in an effort to streamline the form, 

replacing the Form 5500, Form 5500-C, and Form 5500-R with one Form 

5500 (the current form) to be used by all filers as well as more detailed 

schedules customized to each filer’s type of plan. In addition, the revisions 

eliminated duplicate or obsolete items. Since 1999, other annual revisions 

have included clarifying the Form 5500, its schedules, and instructions; 

adding items on Employee Stock Ownership Plans, frozen plans, and floor 

offset plans; removing items concerning delinquent participant 

contributions and fringe benefit plans; and changing the small plan audit 

requirements. 

Other changes have been proposed that relate to information associated 

with the Form 5500. In January 2005, the Secretary of Labor announced 

the Administration’s proposal to improve retirement security. The 

proposal presented three areas of change, one of them to increase the 

disclosure of information about private, single-employer defined benefit 

pension plans to workers, investors, and regulators.28 The proposal would 

increase disclosure in four ways: (1) reporting ongoing and at-risk liability 

on the Form 5500, (2) shortening the deadline for the Schedule B report of 

the actuarial statement, (3) publicly disclosing Section 4010 information, 

and (4) expanding the information reported on the SAR. 

The Form 5500 lacks key information that could better assist Labor, IRS, 

and PBGC in monitoring plans and ensuring that they are in compliance 

with the law. Federal agency officials and pension researchers 

acknowledge that the form does not collect certain information, such as 

information that could help them to better track plans from year to year, 

 27A Notice of Proposed Forms Revisions soliciting public comments on proposed revision 

of the Form 5500 was published in the Federal Register on September 3, 1997 (62 Fed. Reg. 

46556). 

28The three areas to strengthen retirement security for Americans in private defined benefit 

pension plans are (1) reforming the funding rules to ensure that employer fully fund their 

retirement promises, (2) reforming the PBGC premiums to better reflect the real risks and 

costs, and (3) increasing the disclosure of information about private defined benefit to 

workers, investors, and regulators. 

The Form 5500 Still Lacks 

Key Information 
Page 39 GAO-05-491 Private Pensions 

and certain information on multiemployer plans and defined contribution 

plans. 

Labor, IRS, and PBGC officials said that they have experienced difficulties 

when relying on Form 5500 information to identify and track all plans 

across years. Although these agencies have a process in place to identify 

and track plans filing a Form 5500 from year to year, problems still arise 

when plans change employer identification numbers (EIN) and/or plan 

numbers. Currently, Labor, IRS, and PBGC use the EINs and plan numbers 

listed on the form to identify and track individual plans from one year to 

the next.29 However, officials from these agencies reported they are having 

problems using EINs and plan numbers to consistently and accurately 

track all plans because many employers have numerous plans and each 

plan files Form 5500 Reports using the same EIN. As a result, only the 

three-digit plan number assigned by the plan administrator uniquely 

identifies plan filings that have identical EINs. However, when plan 

administrators do not file their Form 5500 with the same plan number each 

year, absent a unique EIN, it is difficult for federal agencies to track the 

same plan from year to year. Identifying plans is further complicated when 

plan sponsors are acquired, sold, or merged. In these cases, agency 

officials said that there is an increased possibility of mismatching of EINs, 

plans, and their identifying information. 

Agency officials also told us that without a reliable way to identify and 

track plans a number of problems occur. For example, Labor officials said 

they are unable to (1) verify if all required employers are meeting the 

statutory requirement to file a Form 5500 annually, (2) identity all late 

filers, and (3) assess and collect penalties from all plans that fail to file or 

are late. IRS officials said that EINs reported on the Form 5500 do not 

always match EINs listed on a corporate tax return of a business; this 

makes it difficult for IRS to individually match businesses’ Form 5500 

Reports with their corporate tax returns. PBGC officials said they must 

spend additional time each year trying to identify and track certain defined 

benefit pension plans so that they can conduct their compliance and 

research activities. Furthermore, other federal agencies and researchers 

said that the inability to identify and track plans limits their ability to 

effectively identify all of the pension plans associated with a particular 

company, track changes over time in certain types of pension plans, and 

match Form 5500 information with other data sources. Labor, IRS, and 

 29The EIN is also used in a wide variety of employer tax filings. 
Page 40 GAO-05-491 Private Pensions 

PBGC officials said they are considering measures to better track and 

identify plans but have not reached any conclusions. 

We were also told that the Form 5500 lacks certain information on 

multiemployer plans that would enable PBGC, other federal regulators, 

and pension researchers to (1) identify all of the participating employers in 

a particular multiemployer plan; (2) determine a multiemployer plan’s 

basis for making contributions; and (3) determine the amount of unfunded 

liabilities attributable to each participating employer. Currently, the form 

does not collect information that identifies the employers participating in 

a particular multiemployer plan. Thus, PBGC and other regulators are 

unable to identify all the employers upon whose financial health 

multiemployer plans depend or link the financial health of these 

employers to the condition of the particular multiemployer plans that 

these employers are participating in. PBGC officials said they are unable to 

gauge the full impact that events such as employer bankruptcies, 

withdrawals, and labor strikes would have on multiemployer plans, their 

participants, and the agency’s multiemployer insurance program, which 

they emphasized as important, given that with multiemployer plans, an 

employer’s pension liabilities can be affected by the financial health of 

other employers in the plan. The form also lacks information that shows a 

multiemployer plan’s basis for employer contributions, which means that 

PBGC cannot determine the impact that events, such as labor strikes, 

would have on an employer’s ability to make plan contributions and its 

effect on the financial condition of that particular plan. Finally, the Form 

5500 does not capture information on each participating employer’s 

responsibility for unfunded liabilities. Thus, PBGC is unable to assess the 

financial risk to an insured multiemployer plan posed by the financial 

collapse or withdrawal of one or more contributing employers, which 

PBGC officials said is an important piece of information because of its role 

in monitoring multiemployer plans for financial problems, providing 

financial and technical assistance to troubled plans and guaranteeing a 

minimum level of benefits to participants in insolvent multiemployer 

plans.30 PBGC officials said that the agency needs relevant information on 

multiemployer plans to fully assess the financial health of and potential 

risks faced by multiemployer plans, and they said that this information is 

currently lacking on the Form 5500. PBGC officials also said they are 

exploring ways to obtain more useful information on multiemployer plans. 

 30A multiemployer plan is insolvent when its available resources are not sufficient to pay 

the level of benefits at PBGC’s multiemployer guaranteed level. 
Page 41 GAO-05-491 Private Pensions 

However, their plans are still in the developmental stages. In addition, 

officials from Labor, IRS, and other federal agencies and pension 

researchers said it would be useful if the Form 5500 captured more 

information on multiemployer plans. 

Federal and private sector researchers said the Form 5500 has not kept 

pace with changes in the private pension universe, where defined 

contribution plans have become the more prevalent type of private 

pension plan offered by employers and more employees are increasingly 

being covered by defined contribution plans. They said the Form 5500 is 

geared more toward defined benefit plans rather than toward defined 

contribution plans and suggested that the form could collect detailed 

information on the range of investment options that are available to 

participants (employer securities and mutual funds), 401(k) plan matching 

contributions, employee contribution limits, as well as more detailed 

information on the asset allocations of pooled accounts. They also said 

that the form could collect better information to determine the true cost of 

administering a defined contribution plan and 401(k) plan fees. For 

example, the ERISA Advisory Council Working Group recently reported 

that the Form 5500, as currently structured, does not reflect the way that 

the defined contribution plan fee structure works. The Advisory Council 

concluded that Form 5500s filed by defined contribution plans are of little 

use to policy makers, government enforcement personnel, plan sponsors, 

and participants in terms of understanding the cost of a plan. The Advisory 

Council also recommended that Labor modify the Form 5500 and the 

accompanying schedules so that total fees incurred either directly or 

indirectly by these plans can be reported or estimated.31 This information 

could be used for research or regulatory purposes. 

In addition to having more information on defined contribution plans, 

federal and private sector researchers also said that it would be useful if 

information reported on Section 4010 filings, such as information about 

the ability of a defined benefit plan to meet its obligations to participants if 

 31One of Labor’s objectives in requiring a plan to file a Form 5500 report is to ensure that 

plan fiduciaries are monitoring the operations of the plan, including costs. This is 

consistent with the overarching fiduciary responsibility provisions of ERISA, which require 

plan fiduciaries to review and monitor fees for reasonableness on a periodic basis. 

Federal and Private Sector 

Researchers Said the Form 

5500 has Not Kept Pace 

with Changes in the 

Private Pension Universe 
Page 42 GAO-05-491 Private Pensions 

the plan were to be terminated,32 were captured on the Form 5500. Section 

4010 filings (named after the ERISA section that requires companies to 

submit such reports) also include proprietary information about the plan 

sponsor and its pension assets. However, this information is available only 

to PBGC and by law may not be publicly disclosed. Some officials told us 

that participants should be provided with the necessary information, 

including Section 4010 data, to inform them when their plan is 

underfunded and when the sponsor’s financial condition may impair the 

ability of the company to fund or maintain the plans. 

Despite federal agencies’ attempts to streamline the form, pension 

practitioners and service providers said that the Form 5500 can be further 

streamlined by removing duplicate items and consolidating certain 

schedules. Pension practitioners and service providers told us that 

opportunities exist to modify and consolidate certain financial schedules 

and provided us with recommendations that in their opinion would better 

capture relevant information about pension plans for the federal 

government, participants, plan sponsors, and pension practitioners, as 

shown in table 4. However, Labor, IRS, and PBGC officials told us that, to 

some extent, they use all of the information reported on the Form 5500. In 

addition, pension researchers told us that removing certain information 

from the form, such as plan financial information, may limit their ability to 

use the form for research and statistical purposes. 

 32Terminating an underfunded single-employer defined benefit plan is termed a distress 

termination if the plan sponsor requests the termination or an involuntary termination if 

PBGC initiates the termination. PBGC assumes responsibility for terminated underfunded 

plans and pays the pension obligations to plan participants up to the amount guaranteed 

under Title IV of ERISA. PBGC also makes a claim on the employer’s assets in bankruptcy 

proceedings as an unsecured creditor. However, PBGC officials told us that the agency’s 

claims usually amount to only a few cents per dollar claimed. 

Pension Practitioners and 

Others Said the Form Can 

Be Further Streamlined 
Page 43 GAO-05-491 Private Pensions 

Table 4: Recommendations from Pension Practitioners and Service Providers for Further Streamlining the Form 5500 

Financial Schedules 

Schedule A–Insurance Information 

• Schedule A commission information could be captured on the Form 5500. 

• Items relating to the reporting of Pooled Separate Accounts on Schedule A could be removed since the information is already 

required to be reported for Schedule D. 

Schedule D–Direct Filing Entities/Participant Plan Information 

• Schedule D could be limited to reporting information by Direct Filing Entities. 

• Plans that invest in Direct Filing Entities should not file Schedule D because the current reporting format is very cumbersome and it 

does not appear to provide useful information to plan sponsors, participants, and the government. 

Schedule G–Financial Transaction Schedules 

• Schedule G should be discontinued because this information appears in supplemental schedules that is a required part of the 

auditor’s report. 

• Information that appears in the auditor’s report, including footnotes and supplemental schedules, should not be duplicated on the 

Form 5500 or its schedules since its considered part of the Form 5500 filing. 

Schedule P–Annual Return of Fiduciary 

• Schedule P should be removed and have the filing of the Form 5500 start the statute of limitations instead of the signing of 

Schedule P. However, eliminating the Schedule P would require changes to the current statutory framework. 

Schedules H and I–Financial Information 

• Schedules H and I can be simplified into a single format because some information on these schedules is already provided in the

auditor’s report. 

Benefit Schedules 

Schedule B–Actuarial Information 

• Schedule B attachments could be eliminated or the actuarial valuation report substituted for the attachments. 

Schedule E–ESOP Annual Information 

• Schedule E could be streamlined by capturing some of its information using codes on the Form 5500. 

Schedules R (Retirement Plans Information) and T (Qualified Pension Plan Coverage) 

• Schedules R and T could be modified to codes on the Form 5500. 

• Questions 1 and 2 on the Schedule R relating to distributions could be moved to Schedules H and I, which would eliminate the 

need to file the Schedule R for every plan. 

Source: Pension practitioners and service providers. 

The Form 5500 is the primary source of information available concerning 

the operation, funding, assets, liabilities, and investments of private 

pension plans. Because these data are important to enforcement of federal 

pension laws and to pension policy development, it is important that Form 

5500 information be timely and useful. Changes in the private pension 

world illustrate why improvements to the Form 5500 and its processing 

are so important. For example, the private pension environment has been 

changing fundamentally in the types of plans offered today’s workers, yet 

little has been done to reflect these changes in the types of data collected. 

Conclusions 
Page 44 GAO-05-491 Private Pensions 

In addition, the sudden deterioration in funding levels for some large 

defined benefit plans has brought financial pressures to PBGC and led to 

calls for comprehensive reforms, but Form 5500 data are not timely 

enough to help policy makers in developing effective responses. Untimely 

pension plan information forces policy makers to make key pension policy 

decisions based on data that are about 3 years old. It also hampers 

regulators’ ability to enforce ERISA and other laws and results in users 

getting an outdated picture of the financial condition of the private 

pension plan environment. 

Although Labor has made significant progress in implementing EFAST, 

more should be done to reduce the time it takes to process and release 

usable computerized Form 5500 information. Changes to the current 

system, such as utilizing its electronic filing capabilities and improving its 

paper-based correspondence process, could speed up the processing of 

Form 5500 Reports and provide more timely data for all users. 

Alternatively, certain types of information could be reported earlier than 

the current filing deadline, such as information on a plan’s funding status, 

which could also provide regulators with more timely information. 

Content issues also remain a problem, despite Labor’s, IRS’s, and PBGC’s 

periodic revisions to the form. Information currently collected on the 

form, while useful to some extent, does not permit these agencies to be in 

the best position to ensure compliance with federal laws and accurately 

assess the financial condition of private pension plans. Given the increase 

in the number of defined contribution pension plans and the need for 

relevant information on multiemployer plans, providing better information 

on these plans would help policy makers and others make informed 

decisions about the financial risks posed by private pension plans. 

However, any improvement to the content of the Form 5500 must be done 

in such a way that does not pose an undue burden on plan sponsors. 

Given the improved timeliness and reduced errors associated with 

electronic filing, Labor, IRS, and PBGC should require the electronic filing 

of the Form 5500. In doing so, Labor should also make improvements to 

the current electronic filing process to make it less burdensome, such as 

revising the procedure for signing and authenticating an electronic filing. 

To improve timeliness, reduce errors, and maximize efficiency, Labor 

should modify its current EFAST processing methods. In doing so, the 

following steps should be considered: 

Recommendations 
Page 45 GAO-05-491 Private Pensions 

• Labor should streamline its data correction processes by ensuring that 

filings are checked for errors before they are accepted for processing 

by the EFAST system. 

• It should develop an electronic-based correspondence process, 

whereby the agencies can notify filers of errors electronically, thereby 

eliminating the 30 days that officials at Labor estimate it takes to mail 

the paper-based correspondence back and forth. Also this will allow for 

filers to be notified of errors on a more timely basis. 

Considering the need for federal agencies, Congress, and the public to 

have access to timely and usable Form 5500 information as soon as 

possible, we recommend that Labor evaluate ways to speed up the release 

of its research file, including considering making information available 

from the file on an interim basis prior to its completion and final release to 

the public. 

To more effectively identify and track individual plans across years, 

especially when plans change EINs and plan numbers, and to take into 

account Labor’s need to be able to verify if all required employers are 

meeting the statutory requirement to file a Form 5500 annually, we 

recommend that Labor, IRS, and PBGC work collectively to better identify 

and track the same plan from one year to the next. 

To improve the federal government’s ability to regulate multiemployer 

defined benefit pension plans and improve participant information, we 

recommend that Labor, IRS, and PBGC modify the Form 5500 to collect 

additional information on multiemployer pension plans that would enable 

Labor, IRS, and PBGC to monitor and manage potential risks associated 

with events such as employer bankruptcies, withdrawals, and labor strikes 

and the attendant consequences for these plans, plan participants, and 

PBGC’s multiemployer insurance program. In doing so, Labor, IRS, and 

PBGC should consider requiring multiemployer plans to report the 

following information on the Form 5500: 

• information sufficient to identify all of the employers associated with a 

particular plan and their annual contributions to the plan, 

• plan specifics on determining employer contributions (per hour, per 

unit of output, etc.), and 

• the distribution by employer of responsibility for unfunded or 

underfunded plan liabilities. 
Page 46 GAO-05-491 Private Pensions 

We provided a draft of this report to Labor, PBGC, IRS, and SSA. Labor, 

PBGC, and IRS provided written comments, which appear in appendix I, 

appendix II, and appendix III. Labor’s, PBGC’s and IRS’s comments 

generally agree with the findings and conclusions of our report. Labor, 

PBGC, IRS, and SSA also provided technical comments on the draft. We 

incorporated each agency’s comments as appropriate. 

Labor suggested that we clarify our assertion that the Form 5500 could 

collect information that could help agencies better identify and track plans 

across years. Labor stated that the Agencies currently apply computerized 

“entity control” tests to Form 5500 filings as part of the EFAST processing 

system that are designed to track individual plans and determine if 

consistent identifying data are reported each year for a particular filer in 

order to maintain accurate year-to-year records for each filer. We have 

clarified that section of our report by noting that the agencies’ have a 

system in place to identify and track plans and the shortcomings of this 

method. However, although a system is in place to track plans from year to 

year, officials from all the principal agencies said that it is very difficult to 

track plans from year to year if plans change EINs and plan numbers. 

Labor and PBGC suggested that the section of our report on the timeliness 

of available Form 5500 information further clarify that generally individual 

Form 5500 filings are made available for enforcement and for public 

disclosure as soon as they are processed by EFAST. We agree and did note 

that in the appropriate section of the report. We have also revised our 

report in various sections to state that Form 5500 information is available 

for enforcement and public disclosure purposes prior to the release of the 

Form 5500 research file. 

PBGC proposed an additional recommendation regarding the timeliness of 

defined benefit pension plan funding information reported on Form 5500 

Schedule B. The Administration’s pension reform proposal includes a 

provision that would advance the reporting date for the Schedule B to 

February 15 for certain large defined benefit plans. We agree with PBGC 

that advancing the reporting date for the Schedule B to provide more 

timely information on such plans to Labor, IRS, and PBGC could be an 

important piece of comprehensive pension reform. 

IRS specifically stated that, with electronic filing, EFAST can validate 

filings as received, reject filings with errors or incomplete responses, and 

minimize or eliminate error correction using electronic correspondence. 

IRS also stated its support for our recommendations to require the 

electronic filing of Form 5500 Reports, evaluate ways to better identify and 

Agency Comments 
Page 47 GAO-05-491 Private Pensions 

track plans from year to year, and to modify the Form 5500 to collect 

additional information on multiemployer pension plans. 

We are sending copies of this report to the Secretary of Labor, the 

Commissioner of Internal Revenue, the Executive Director of the Pension 

Benefit Guaranty Corporation, the Commissioner of Social Security, 

appropriate congressional committees, and other interested parties. We 

will also make copies available to others on request. In addition, the report 

will be available at no charge on GAO’s Web site at http://www.gao.gov. 

If you have any questions concerning this report please contact me at 

(202) 512-7215 or Tamara Cross at (202) 512-4890. Other contacts and 

acknowledgments are listed in appendix IV. 

Barbara D. Bovbjerg 

Director, Education, Workforce, 

 and Income Security Issues 
Page 48 GAO-05-491 Private Pensions 

List of Congressional Committees 

The Honorable Charles E. Grassley 

Chairman 

The Honorable Max S. Baucus 

Ranking Minority Member 

Committee on Finance 

United States Senate 

The Honorable Michael B. Enzi 

Chairman 

The Honorable Edward M. Kennedy 

Ranking Minority Member 

Committee on Health, Education, Labor, and Pensions 

United States Senate 

The Honorable John A. Boehner 

Chairman 

The Honorable George Miller 

Ranking Minority Member 

Committee on Education and the Workforce 

House of Representatives 

The Honorable William M. Thomas 

Chairman 

The Honorable Charles B. Rangel 

Ranking Minority Member 

Committee on Ways and Means 

House of Representatives 
Appendix I: Comments from the Department 

of Labor 

Page 49 GAO-05-491 Private Pensions 

Appendix I: Comments from the Department 

of Labor 
Appendix I: Comments from the Department 

of Labor 

Page 50 GAO-05-491 Private Pensions 
Appendix I: Comments from the Department 

of Labor 

Page 51 GAO-05-491 Private Pensions 
Appendix II: Comments from the Pension 

Benefit Guaranty Corporation 

Page 52 GAO-05-491 Private Pensions 

Appendix II: Comments from the Pension 

Benefit Guaranty Corporation 
Appendix II: Comments from the Pension 

Benefit Guaranty Corporation 

Page 53 GAO-05-491 Private Pensions 
Appendix III: Comments from the Internal 

Revenue Service 

Page 54 GAO-05-491 Private Pensions 

Appendix III: Comments from the Internal 

Revenue Service 
Appendix IV: GAO Contacts and Staff 

Acknowledgments 

Page 55 GAO-05-491 Private Pensions 

Tamara Cross, Assistant Director (202) 512-4890 

Raun Lazier, Analyst-in-Charge (202) 512-8386 

In addition to those named above, Joseph Applebaum, Richard Burkard, 

Scott Heacock, Gene Kuehneman, Michael Maslowski, Robert Parker, 

Roger J. Thomas, and Gail Vallierers made important contributions to this 

report. 

Appendix IV: GAO Contacts and Staff 

Acknowledgments 

Contacts 

Staff 

Acknowledgments 

(130375) 
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