"ERISA’s Revised Schedule C: Many Tentacles and Lots of Ink"


As plan administrators and the many service providers to retirement plans covered under the Employee Retirement Income Security Act of 1974, as amended, are finding, there are significant challenges to responding to the revised reporting requirements of Schedule C of the Department of Labor's Form 5500. These are due principally to the following:

·        the unprecedented breadth of the disclosure requested;

·        the extreme granularity of the information involved (amounts must be listed across approximately 58 established codes);

·        reporting rules that apply to many entities not traditionally subject to ERISA, such as mutual funds registered under the Investment Company Act of 1940, and those private investment funds that limit 'benefit plan investor' money to less than 25 percent of each class of equity interests in the fund; and

·        the interconnected and complex nature of commercial and financial transactions generally, with multiple participants, diverse distribution networks of products and services, and diffuse business models that sometimes frustrate the goal of uniform and compatible reporting and systems.

It is no wonder that for many plan administrators and financial services companies, ERISA is beginning to feel like a very large octopus, and that providing the information envisioned by Schedule C may require (to paraphrase Sir Winston Churchill) a good deal of toil, tears, sweat . . . and ink.

For illustrative purposes, the Attachment to this article provides a visual, hypothetical example of the types of information a large financial institution may need to consider in the context of Schedule C reporting.