SAR Is Due by September 30 for Calendar Year Plans

Many employers that must file Form 5500 on behalf of their employee benefit plans must also provide plan participants with a summary annual report (SAR). The SAR summarizes the information included in Form 5500. Employers with plans that operate on a calendar year basis must provide the SAR by September 30, 2025. However, if the employer receives an extension of time to file its Form 5500, the deadline for providing the SAR is December 15, 2025.

Summary Annual Report Requirement

Each year, employers with large fully insured welfare plans (100 or more participants) must file an annual report (Form 5500) with the U.S. Department of Labor (DOL) for their employee benefit plans, unless a reporting exemption applies. Employers must also give plan participants a summary (SAR) of Form 5500 each year, free of charge.

If a plan is exempt from the annual reporting requirements (Form 5500), it is also exempt from the SAR requirements. Large unfunded welfare plans (100 or more covered participants) are subject to the Form 5500 requirement; however, these plans are exempt from the requirement to provide an SAR. Benefits of an unfunded welfare benefit are paid directly from the general assets of the employer sponsoring the plan. A plan that uses a trust or separately maintained fund to hold plan assets or pay benefits is not unfunded.

SAR Required Content

The SAR must include certain information, provided that the information was required to be on the plan’s Form 5500. In general, an SAR must include the following:

Funding and Insurance Information

If a plan is uninsured, the SAR must state the types of claims the plan sponsor is committed to paying. If insured, the SAR must state the types 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

It should include a statement that plan participants have the right to request a copy of the full annual report (Form 5500).

Offer of Assistance in Non-English Language

Large plans (covering more than 100 participants) that have the lesser of 10% or 500 or more covered participants literate only in the same language, and small plans (covering fewer than 100 participants) if 25% 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.

The DOL has released a model SAR that employers may customize and use.

SAR Deadline

The SAR must be provided within nine months of the close of the plan year. For calendar-year plans, this deadline is September 30. Employers may receive a two-and-one-half-month Form 5500 filing extension by filing IRS Form 5558. If the Form 5500 deadline was extended, the employer must provide the SAR within two months of the close of the extension period. For calendar-year plans, this extended deadline is December 15.

Distribution Methods

SARs may be distributed by any method that is permissible for summary plan descriptions. These methods include:

• hand delivery to employees at their worksite,
• U.S. mail, or
• electronic delivery (if certain requirements are satisfied).

Rules for Electronic Delivery

DOL regulations include a safe harbor for employers to use electronic media to distribute certain ERISA-required documents, including the SAR. The DOL’s safe harbor allows employers to distribute ERISA disclosures to: (1) employees with work-related computer access, and (2) other plan participants and beneficiaries who consent to receive disclosures electronically. In addition, to satisfy the safe harbor, employers must notify plan participants each time the disclosure is provided electronically, and they must take steps to ensure that the electronic delivery results in actual receipt.

Reach out to your Hylant representative for further information. Don’t have one? Contact us here.

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