Q. Prepare an executive summary of the Annual Report of your bank highlighting the essential features with a note of aspiration for growth.
Administrators of most private sector, employer-sponsored health insurance and benefit plans have a legal obligation to distribute a summary annual report to plan participants. With the exception of a daycare center, which isn’t governed by the Employee Retirement Income Security Act, this requirement extends to small businesses offering a 1(k) or SEP retirement plan or a profit-sharing plan. Compliance is mandatory, and penalties for willful noncompliance can include a fine of up to 100000, imprisonment for up to 10 years or both.
Distribution a Summary Annual Report
A summary annual report is a condensed version of the Form 5500 report, which plan administrators must file with the Department of Labor for each ERAIS covered plan. For example, if a business offers a 401(k) retirement plan, a group health insurance plan and a dental and vision plan, it must distribute a separate summary annual report for each of these plans. In addition, distribution requirements extend to active plans as well as any plans terminated in the previous calendar year.
Distribution Time Frame
ERISA regulations state that unless a business requests and receives a two-month extension from the Internal Revenue Service, plan administrators must distribute a summary annual report by the last day of the ninth month following the end of the business’s fiscal year. This means if a business’s fiscal year ends on October 31, the report must be distributed by July 31- or September 30 if an extension was granted of the following year.
A business has the option to distribute a summary annual report using any measure “reasonably calculated to ensure actual receipt of the material,” including personally, via postal mail or electronically. There are, however, guidelines that must be followed if the business opts for electronic delivery. The plan administrator must provide advance notice the summary annual report will be sent electronically and offer the recipient a free paper copy. If the summary annual report is sent via email, the recipient must be able to access it at the work site and print it free of charge. In addition, the plan administrator must ensure the recipient actually receives the summary annual report, such as by including a return-receipt request.
The content in a summary annual report will vary according to the information in its corresponding from 5500 health or benefit plan annual report. Regardless, however, each has a specific format the summary annual report must follow and specific financial information each must include. For example, a summary annual report for a retirement plan must include a basic financial statement identifying plan expense the value of the plan’s assets, an actuary statement as to whether enough money was contributed to the plan to keep it funded in accordance with the minimum funding standards of ERISA and a section outlining a participant’s rights to additional information.