General Introduction
The office of Employee Plans (EP) under the Tax Exempt & Government Entities (TE/GE) operating division of the Internal Revenue Service helps retirement plan sponsors, plan participants, and practitioners working in the retirement benefits arena understand and comply with the pension law.
Historical Background
On September 2, 1974, President Ford signed into law the Employee Retirement Income Security Act of 1974, Public Law 93-406, 93d Cong. 2d Sess. (1974), 1974-3 C.B. 1, (ERISA). The Act completely revised the legal framework of the qualified pension plan as it had previously existed. The most significant innovations of ERISA concerned minimum participation and vesting standards and the manner in which benefits were paid with some protection extending to the surviving spouse of the plan participants. In addition, the Act imposed upon all pension plans certain minimum funding requirements.
Administrative Responsibility for Retirement Plans
Under ERISA, jurisdiction over employee benefit plans was divided among the Internal Revenue Service (IRS), the Department of Labor (DOL) and the Pension Benefit Guaranty Corporation (PBGC).
The responsibility of the IRS centers on plans covered by Internal Revenue Code (IRC) section 401(a), and includes pension, profit-sharing, and stock-bonus plans. The DOL shares some responsibility in this area, but primarily from the perspective of fiduciary responsibility and prohibited transactions. DOL is also responsible for such plans as health and welfare plans, legal aid plans and other plans that are not designed to provide retirement benefits or the deferral of income.
The PBGC is a government corporation created by ERISA that functions as insurer of a minimum guaranteed benefit for certain pension plans. Although jurisdiction is divided among the agencies, the Act requires that they coordinate their activities. This activity most commonly occurs between the IRS and DOL due to the overlap in the nature of their responsibilities.
What We Do
The pension law provides significant tax benefits for sponsors of certain retirement plans (such as 401(k) plans) and the employees that participate in them. Our EP Examinations activities promote voluntary compliance by analyzing operational features of retirement plans. A centralized examination case selection and review process is used to enhance consistency of enforcement activities and to focus resources on the areas of highest noncompliance. Through our Customer Education & Outreach office, we provide services and information about retirement plan requirements. Our services under Rulings and Agreements are designed to help customers understand and comply with the pension law, and assist customers in correcting mistakes that may occur when administering the plan. These services help conserve plan benefits until an employee’s retirement, and help preserve the tax benefits associated with these plans. Additional information regarding our unique services is presented in our online brochure, Publication 3636. The EP Work Plan sets forth the operating priorities and program guidance that will guide EP's work over the coming year.
Statistical Information on Retirement Plans
- Tax Exempt/Employee Plans Statistics - Employee Plans
IRS statistics on determinations, examinations and annual returns filed.
- Private Pension Plan Bulletin - Abstract of 2004 Form 5500 Annual Reports
DOL statistics on plans, participants, assets, income and expenses based upon 2004 Form 5500 filings.
- PBGC 2006 Annual Report
PBGC statistics on defined benefit plans, including multiemployer plans.
- Pension Insurance Data Book 2005
Detailed statistics on PBGC program operations and benefit protection.
- Accumulation and Distribution of Individual Retirement Arrangements, 2004
Article by Victoria L. Bryant, SOI
For 2004, 14.7 million individual income taxpayers contributed approximately $48.7 billion to Individual Retirement Arrangements (IRAs). In addition, they reported $214.9 billion as rollovers into IRAs, usually from employer-sponsored plans, such as 401(k) plans. At year-end, approximately 50.9 million taxpayers held $3.3 trillion in IRAs based on fair market value.
- Are Taxpayers Increasing the Buildup of Retirement Assets? Preliminary Results from a Matched File of Tax Year 1999 Tax Returns and Information Returns
Paper by Peter J. Sailer, Michael E. Weber, and Kurt S. Gurka, Statistics of Income Division, IRS
- Trends in Retirement Plan Coverage Over the Last Decade
Article in the February 2006 (Vol. 129, Number 2) edition of the Monthly Labor Review (DOL's Bureau of Labor Statistics)
Additional Resources
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Retirement Plans Community
A brief description of the types of retirement plans and taxpayer groups that are covered by the Retirement Plans Community web pages.
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