March 8, 2010 – The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued Advisory Opinion 2010-01A as a response to an inquiry by one of the largest providers of IRC Sec. 403(b) plan services. The provider requested an opinion on whether certain annuity accumulations must be reported as plan assets on Form 5500, Annual Return/Report of Employee Benefit Plan.
Specifically, the provider requested an opinion on a specific investment annuity product offered in conjunction with (for purposes of this opinion) its ERISA-governed 403(b) and 401(k) plans. In its finding, EBSA ruled that because the annuity product is not fully allocated (may have a vesting schedule for employer contributions) and is not strictly guaranteed (has a variable interest rate), such investments must be included for Form 5500 reporting purposes. This includes listing the annuity as a plan investment and counting any person invested in that product as a plan participant. EBSA ruled that this requirement is effective for 2009 and later plan years.
While an EBSA advisory opinion is intended chiefly as guidance to the person or organization making the request, such advisory opinions are often viewed as representing positions that EBSA would likely take in similar situations with other entities.
Advisory Opinion 2010-01A may be accessed as follows.
http://www.dol.gov/ebsa/pdf/ao2010-01a.pdf