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SAR Deadline Is Approaching for Calendar Year Plans

For calendar year plans, this generally means the SAR is due by September 30.

August 3, 2023

Each year, employee benefit plan administrators are generally required to furnish a summary annual report (SAR) to covered individuals within nine months of the close of the plan year, or within two months after the due date for filing Form 5500 with an extension. For calendar year plans, this generally means the SAR is due by September 30. For calendar year plans that have filed for an extension using Form 5558, the SAR is due by December 15.

Summary Annual Report

The SAR is a summary of the annual financial report that most plans must file with the Department of Labor (DOL) on Form 5500. If a plan is exempt from filing a Form 5500, it is also exempt from the SAR requirement. Additionally, welfare plans that are totally unfunded do not have to provide a SAR.

Required Content for the SAR

DOL regulations require that certain categories of information be covered in the SAR. If information is not found in the plan’s Form 5500, it need not be included in the SAR. The SAR should include the categories of information listed below. Sample SAR language can be found on the DOL’s website.

  • Funding and Insurance Information—If a plan is uninsured, then the SAR must state the types of claims the plan sponsor is committed to pay. If insured, the SAR must state the type of claims the plan has contracts with insurance carriers to pay, along with the names of the insurers and the annual premium paid.
  • Basic Financial Information—If plan assets are held in trust or a separately maintained fund, the SAR should include the value of the plan assets at the beginning and end of the plan year, as well as the amount of increase or decrease in net assets. The SAR should also include the amount of total income during the plan year and plan expenses.
  • Rights to Additional Information—A statement that the individual receiving the report has the right to request a copy of the full annual report or any part of it.
  • Offer of Assistance in Non-English Language—Large plans (covering more than 100 participants) which have the lesser of 10 percent or 500 or more covered participants literate only in the same language, and small plans (covering fewer than 100 participants) if 25 percent or more of the participants are literate in only the same language must be given an offer of assistance in writing in the non-English language.

Distribution Requirements

SARs should be provided to participants covered under the plan and to those who receive a Summary Plan Description (SPD). The distribution methods that apply to an SPD also apply to a SAR, therefore, electronic disclosure may be permissible. SARs must be given within nine months of the end of the plan year. However, if an extension was granted for filing Form 5500, the SAR is due within two months after the extended due date for filing Form 5500.

Reach out to your Hylant representative for further information.

The above information does not constitute advice. Always contact your employee benefits broker or trusted advisor for insurance-related questions.

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