ASPA has posted on their website some very interesting testimony presented to the 2004 ERISA Advisory Council on Employee Welfare and Pension Benefit Plans Working Group on Health and Welfare Form 5500 Requirements. The testimony was given by Janice M. Wegesin, President of JMW Consulting. Dittos on this statement from her testimony:
Engagement of my firm often starts with a compliance review. The client delivers to me all of the benefits communication materials that are normally provided to its new employees and, from that, a list of plans subject to ERISA is developed. The next step in the review involves collection of the plan documents, summary plan descriptions, and Form 5500 filings for those plans. A client typically has no difficulty presenting the documentation and filings relating to its qualified retirement plans; however, it is frequently an entirely different story for its welfare benefit plans. Although a §125 cafeteria plan document may exist, the “documents” for the medical, dental, and life plans may consist solely of the employee booklet issued by the insurance carrier. For some benefits, the only “document” may be the information presented in the employee handbook.
Besides the documentation probems, she goes on to note how few clients fulfill ERISA filing requirements either with respect to such plans:
Many tax form preparers do not have the skills necessary to properly advise the plan sponsor about welfare plan reporting, so merely continue to prepare only those Form 5500 filings that the plan sponsor has historically filed. Large employers often prepare Form 5500 filings for welfare plans (but not qualified retirement plans) in-house and, again, the SALY (same as last year) principal applies. No thought is given to changing circumstances and benefit structures and the impact on Form 5500 reporting.