DOL Summary Annual Report (SAR) Template[*]
An SAR is a summary of certain information contained in a plan’s annual report on Form 5500, along with notification to participants of their rights under ERISA to receive additional information. ERISA requires that an SAR be given to each participant covered under an ERISA welfare benefit plan. While most plans that are required to Form 5500 are also required to provide SARs, a plan is exempt from this requirement if it is a totally unfunded welfare plan under which benefits are paid solely from the general assets of the employer or employee organization maintaining the plan.
The SAR must be furnished to plan participants within nine months after the end of each plan year. If, however, an extension of time to file Form 5500 was granted, the time to provide the SAR is also extended. In that case, the SAR must be furnished within two months after the extended deadline for filing the Form 5500.
The DOL’s template for SARs is required, except that any provision in the model SAR that is irrelevant may be omitted. The SAR template, adapted for use with a welfare benefit plan is set out below.
SARs may be distributed in any manner that would be satisfy the DOL rules for distribution of SPDs.
Summary Annual Report for [Name of Plan]
This is a summary of the annual report of the [name of plan, EIN and type of welfare plan] for [period covered by this report]. The annual report has been filed with the Employee Benefits Security Administration, as required under the Employee Retirement Income Security Act of 1974 (ERISA).
[If any benefits under the Plan are provided on an uninsured basis:]
[Name of sponsor] has committed itself to pay [all, certain] [state type of] claims incurred under the terms of the plan.
[If any of the funds are used to purchase insurance contracts:]
The plan has (a) contract(s) with [name of insurance carrier(s)] to pay [all, certain] [state type of] claims incurred under the terms of the plan. The total premiums paid for the plan year ending [date] were [$_____].
[If applicable, add:]
Because (it is a) (they are) so called "experience-rated" contract(s), the premium costs are affected by, among other things, the number and size of claims. Of the total insurance premiums paid for the Plan year ending [date], the premiums paid under such "experience-rated" contract(s) were [$_____] and the total of all benefit claims paid under the(se) "experience-rated" contract(s) during the plan year was [$_____]
[If any funds of the plan are held in trust or in a separately maintained fund:]
Basic Financial Statement
The value of plan assets, after subtracting liabilities of the Plan, was [$_____] as of [the end of the plan year], compared to [$_____] as of [the beginning of the plan year]. During the plan year the Plan experienced an [increase] [decrease] in its net assets of [$_____]. This [increase] [decrease] includes unrealized appreciation or depreciation in the value of plan assets; that is, the difference between the value of the plan's assets at the end of the year and the value of the assets at the beginning of the year or the cost of assets acquired during the year. During the plan year, the Plan had total income of [$_____] including employer contributions of [$_____], employee contributions of [$_____], realized [gains] [losses] of [$_____] from the sale of assets, and earnings from investments of [$_____].
Plan expenses were [$_____]. These expenses included [$_____] in administrative expenses, [$_____] in benefits paid to participants and beneficiaries, and [$_____] in other expenses.
[*]The information in this document is not intended as legal or tax advice and has been prepared solely for informational purposes. You may wish to consult your attorney or tax adviser regarding issues raised in this document.