An ERISA (Employee Retirement Income Security Act) owner’s manual

Maintenance schedules for employee benefits plans


On Dec. 9, 1963, Studebaker Corp., then the oldest major auto producer in the United States, announced the closing of its manufacturing plant in Indiana. When the plant closed, Studebaker entered into an agreement with its employees, settling the terms for the termination of the employee pension plan.

Under the terms of the agreement, employees 60 years and older received their full pension benefit, but the plan had insufficient assets to meet its obligations to younger employees. Approximately 4,000 employees under the age of 59 each received about 15 percent of the value of their vested benefit. The plan completely defaulted on its obligations to the 2,900 workers under the age of 45.

Though certainly not the only example of financial abuse as it concerns employee benefit plans, the Studebaker debacle was high-profile enough to put the cause of pension reform on the national agenda. Eleven years later, when he signed the Employee Retirement Income Security Act of 1974 (ERISA) into law, President Gerald Ford promised that as a result of its enactment, “the men and women of our labor force will have much more clearly defined rights to pension funds and greater assurances that retirement dollars will be there when they are needed.”

Pre-ERISA, multi-state employers administered the same plan differently in each state in which they conducted business and varying rights and remedies were afforded to employees participating in the same plan depending on where they resided.

ERISA was intended to ensure the financial integrity of employee benefit plans as well as remedy inefficiencies and inequities created by inconsistency in the law. To that end, Congress gave ERISA a preemption clause so that it supersedes all state laws regarding employee benefit plans. It is a broad and complex body of law with many exceptions and exemptions and must be cross-referenced with Internal Revenue Code and Pension Benefit Guaranty Corp. regulations.

There have been rumblings that the U.S. Department of Labor plans to substantially increase the number of compliance audits it conducts each year. The complexity of ERISA creates a significant opportunity for error; the DOL has estimated that three out of four plans audited have ERISA violations. To avoid costly audits and the possibility of severe civil and criminal penalties for noncompliance in the upcoming year, it is essential for every plan to review its plan documents and administrative practices to identify gaps in the plan’s compliance. To ensure future compliance, plan administrators should create a plan- specific checklist that is reviewed on a regular basis.

Just like an old Studebaker, regular maintenance of employee benefits plans can prevent significant problems long term.


Type of Information

To Whom Provided

When Filed

Form 5500

Simplified reporting options are available to certain small plans, including those that cover only a business owner and the owner’s spouse.

Plan type, administration, participation, funding and finances.

Must be filed electronically with the DOL and made available to participants and beneficiaries.

7 months after the close of the plan year.


Reports individuals who are separated from service during the plan year and  entitled to benefits from the plan. 


7 months after the close of the plan year.

Form M-1

Filed only by multiple employer welfare arrangements providing medical care benefits.

Information necessary to confirm the plan’s compliance with the Health Insurance Portability and Accountability Act of 1996.

Must be filed electronically with the DOL.

March 1st

Summary Annual Report

Summarizes information in Form 5500.

Participants and beneficiaries. 

9 months after the close of the plan year.

Annual Funding Notice

Filed only by defined benefit plans.

Information about the funding status and financial condition of the plan.

Participants, beneficiaries, unions, employers with contribution obligations and PBGC.

4 months after the close of the plan year for large plans.  For small plans (100 or fewer participants) the earlier of the date that the Form 5500 is filed or the latest date that the Form 5500 must be filed. 

Attorney Jaime Gillis, a member of Primmer Piper Eggleston & Cramer’s Estate Planning and Probate Practice, can be reached at 603-626-3300 or

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