The 404(c) Question on the Form 5500 (Posted January 15, 2001) Technical Tip 4: The following question and answer were from the DOL Q&A Session at the 2000 ASPPA Annual Conference: Under Question 8a on the new Form 5500, plans are required to report if they intend to comply with the 404(c) criteria. Why has that question been added to the 5500? What does the PWBA plan to do with the information gathered by that question? DOL Response: A request for information on the self-directed and Section 404(c) features of a plan was included on prior versions of Form 5500 as part of the pension code questions. One of the code items referenced whether the plan was participant directed and the instructions to the Form 5500 referenced Section 404(c). Therefore, this is not really a new question but simply a reformulation of preexisting questions. The change in the question is intended to clarify the form of the previous question concerning a plan’s Section 404(c) status and to add two questions concerning whether the plan is partially or wholly self-directed. The two new questions are intended to provide information on participant directed plans without linkage to whether the plans are in compliance with Section 404(c). The questions are intended to be answered based on plan design and how the plan is intended to operate. The question can be answered without a determination if a plan has complied with Section 404(c) in operation in every instance. However, the question contemplates that the plan is intended to satisfy the 404(c) criteria during the reporting period and that the plan can reasonably demonstrate evidence of steps taken to implement that intent. The Department intends to use the information provided by this question for the same purposes as it uses all the information on a Form 5500. The purposes are enforcement targeting, research, policy and development, and public disclosure. Moderators Comment: In responding to the question about 404(c) compliance, plan sponsors and preparers of the Form 5500 should look for objective evidence of the intent to satisfy the criteria. For example, does the SPD contain the 404(c) notice and identify the 404(c) fiduciary. Caveat: The answer was drafted by Fred Reish and Brad Huss, the program moderators, based on their understandings of discussions with four senior officials of the Pension and Welfare Benefits Administration (PWBA) of the U.S. DOL. As a result, it does not represent a formal or binding position statement by the PWBA. View all Tips © 2012 Reish Luftman Reicher & Cohen, a Professional Corporation Important notice: Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.