(a) General. The administrator of a plan required to file an annual
report in accordance with section 104(a)(1) of the Act shall include
with the annual report the information prescribed in paragraph (a)(1) of
this section or in the limited exemption or alternative method of
compliance described in paragraph (a)(2) of this section.
(1) The annual report shall contain the information prescribed in
section 103 of the Act.
(2) Under the authority of sections 104(a)(3) and 110 of the Act, a
limited exemption or alternative method of compliance is prescribed for
employee welfare and pension benefit plans, respectively, which cover
100 or more participants at the beginning of the plan year. A plan
electing the limited exemption or alternative method of compliance shall
file an annual report containing the information prescribed in paragraph
(b) of this section and shall furnish a summary annual report as
prescribed in Sec. 2520.104b-10.
(b) Contents of the annual report for plans with 100 or more
participants electing the limited exemption or alternative method of
compliance. Except as provided in paragraph (d) of this section and in
Sec. Sec. 2520.103-2 and 2520.104-44, the annual report of an employee
benefit plan covering 100 or more participants at the beginning of the
plan year which elects the limited exemption or alternative method of
compliance described in paragraph (a)(2) of this section shall include:
(1) A Form 5500 ``Annual Return/Report of Employee Benefit Plan''
and any statements or schedules required to be attached to the form,
completed in accordance with the instructions for the form, including
Schedule A (Insurance Information), Schedule B (Actuarial Information),
Schedule C (Service Provider Information), Schedule D (DFE/Participating
Plan Information), Schedule G (Financial Transaction Schedules),
Schedule H (Financial Information), Schedule R (Retirement Plan
Information), and the other financial schedules described in Sec.
2520.103-10. See the instructions for this form.
(2) Separate financial statements (in addition to the information
required by
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paragraph (b)(1) of this section), if such financial statements are
prepared in order for the independent qualified public accountant to
form the opinion required by section 103(a)(3)(A) of the Act and Sec.
2520.103-1(b)(5). These statements shall include the following:
(i) A statement of assets and liabilities at current value presented
in comparative form for the beginning and end of the year. The statement
of plan assets and liabilities shall include the assets and liabilities
required to be reported on the Form 5500; however, the assets and
liabilities may be aggregated into categories in a manner other than
that used on Form 5500.
(ii) Separate or combined statements of plan income and expenses and
of changes in net assets which include the categories of income,
expense, and changes in assets reqired to be reported on the Form 5500;
however the income, expense, and changes in net assets may be aggregated
into categories in a manner other than that used on Form 5500.
(3) Notes to the financial statements described in paragraph (b)(1)
or (2) of this section which contain a description of the accounting
principles and practices reflected in the financial statements and, if
applicable, var i anc es from generally accepted accounting principles;
a description of the plan, including any significant changes in the plan
made during the period and the impact of such changes on benefits; the
funding policy (including policy with respect to prior service cost) and
any changes in such policy from the prior year, a description of
material lease commitments, other commitments, and contingent
liabilities; a description of agreements and transactions with persons
known to be parties in interest; a general description of priorities
upon termination of the plan; information concerning whether or not a
tax ruling or determination letter has been obtained; an explanation of
the differences, if any, between the information contained in the
separate financial statements and the assets, liabilities, income,
expenses and changes in the net assets as required to be reported on the
Form 5500, and any other matters necessary to fully and fairly present
the financial condition of the plan.
(4) In the case of a plan, some or all of the assets of which are
held in a pooled separate account maintained by an insurance company, or
a common or collective trust maintained by a bank or similar
institution, a copy of the annual statement of assets and liabilities of
such account or trust for the fiscal year of the account or trust which
ends with or within the plan year for which the annual report is made as
required to be furnished to the administrator by such account or trust
under Sec. 2520.103-5(c). Although the statement of assets and
liabilities referred to in Sec. 2520.103-5(c) shall be considered part
of the plan's annual report, such statement of assets and liabilities
need not be filed with the plan's annual report. See Sec. Sec.
2520.103-3 and 2520.103-4 for reporting requirements for plans some or
all of the assets of which are held in a pooled separate account
maintained by an insurance company, or a common or collective trust
maintained by a bank or similar institution.
(5) A report of an independent qualified public accountant.
(i) Technical requirements. The accountant's report--
(A) Shall be dated;
(B) Shall be signed manually;
(C) Shall indicate the city and state where issued; and
(D) Shall identify without detailed enumeration the financial
statements and schedules covered by the report.
(ii) Representations as to the audit. The accountant's report--
(A) Shall state whether the audit was made in accordance with
generally accepted auditing standards; and
(B) Shall designate any auditing procedures deemed necessary by the
accountant under the circumstances of the particular case which have
been omitted, and the reasons for their omission. Authority for the
omission of certain procedures which independent accountants might
ordinarily employ in the course of an audit made for the purpose of
expressing the opinions required by paragraph (b)(5)(iii) of this
section is contained in Sec. Sec. 2520.103-8 and 2520.103-12.
(iii) Opinion to be expressed. The accountant's report shall state
clearly:
(A) The opinion of the accountant in respect of the financial
statements and
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schedules covered by the report and the accounting principles and
practices reflected therein; and
(B) The opinion of the accountant as to the consistency of the
application of the accounting principles with the application of such
principles in the preceding year or as to any changes in such principles
which have a material effect on the financial statements.
(iv) Exceptions. Any matters to which the accountant takes exception
shall be clearly identified, the exception thereto specifically and
clearly stated, and, to the extent practicable, the effect of the
matters to which the accountant takes exception on the related financial
statements given. The matters to which the accountant takes exception
shall be further identified as (A) those that are the result of DOL
regulations, and (B) all others.
(c) Contents of the annual report for plans with fewer than 100
participants. Except as provided in paragraph (d) of this section and in
Sec. Sec. 2520.104-43 and 2520.104a-6, the annual report of an employee
benefit plan which covers fewer than 100 participants at the beginning
of the plan year shall include a Form 5500 ``Annual Return/Report of
Employee Benefit Plan'' and any statements or schedules required to be
attached to the form, completed in accordance with the instructions for
the form, including Schedule A (Insurance Information), Schedule B
(Actuarial Information), Schedule D (DFE/Participating Plan
Information), Schedule I (Financial Information--Small Plan), and
Schedule R (Retirement Plan Information). See the instructions for this
form.
(d) Special rule. If a plan has between 80 and 120 participants
(inclusive) as of the beginning of the plan year, the plan administrator
may elect to file the same category of annual report (i.e., the annual
report for plans with 100 or more participants under paragraph (b) of
this section or the annual report for plans with fewer than 100
participants under paragraph (c) of this section) that was filed for the
previous plan year.
(e) Plans which participate in a master trust. The plan
administrator of a plan which participates in a master trust shall file
an annual report on Form 5500 in accordance with the instructions for
the form relating to master trusts and master trust investment accounts.
For purposes of annual reporting, a master trust is a trust for which a
regulated financial institution serves as trustee or custodian
(regardless of whether such institution exercises discretionary
authority or control respecting the management of assets held in the
trust) and in which assets of more than one plan sponsored by a single
employer or by a group of employers under common control are held. For
purpose of this paragraph, a regulated financial institution is a bank,
trust company, or similar financial institution regulated, supervised,
and subject to periodic examination by a State or Federal agency. Common
control is determined on the basis of all relevant facts and
circumstances (whether or not such employers are incorporated).
(f) Electronic filing. See Sec. 2520.104a-2 and the instructions
for the Form 5500 ``Annual Return/Report of Employee Benefit Plan'' for
electronic filing requirements. The plan administrator must maintain an
original copy, with all required signatures, as part of the plan's
records.
[43 FR 10140, Mar. 10, 1978, as amended at 45 FR 51446, Aug. 1, 1980; 46
FR 61079, Dec. 15, 1981; 51 FR 41288, Nov. 13, 1986; 54 FR 8627, Mar. 1,
1989; 65 FR 21080, Apr. 19, 2000] 
