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. 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. 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. 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. 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. 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. When the Form 5500 was first developed, nearly 30 years ago, more participants were covered by defined benefit plans than by defined 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. As shown in figure 2, as of 1997, assets held by defined contribution plans exceed those held by defined benefit plans. As shown in figure 3, as of 2000, employers sponsored over 687,000 defined contribution plans compared with about 49,000 defined benefit plans. 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 single- employer 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. Premium revenue totaled about $1.485 billion in 2004, of which $1.458 billion was 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 single- employer 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. 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. 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. 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. 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. 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 employees that participate in them. IRS enforces certain minimum funding requirements of ERISA and the IRC.