Section 110(a) of ERISA authorizes the Department of Labor (the “DOL”) to permit an alternative form of compliance with the reporting and disclosure obligations of Part 1 of Title I of ERISA for “top hat” plans (i.e., “unfunded” plans established for a select group of management or highly compensated employees). Under that authority, the DOL issued a regulation way back in 1975 (29 CFR 2520.104-23) to provide such an alternative method of compliance with reporting and disclosure requirements for top hat plans. Under that guidance, top hat plans are not required to file annual reports (tax-qualified plans use Form 5500 to file those reports). Under this alternative method, a plan administrator must file with the DOL a statement that sets forth the name and address of the employer and its employer identification number; a statement that the employer maintains a plan or plans primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, the number of such plans and the number of participants in each plan. This statement generally must be filed within 120 days of plan adoption.
On September 30, 2014, the DOL proposed new regulations that would require these top hat statements to be made electronically. The stated goal of the DOL is to make the filing of these statements easier—both for plan administrators and for the DOL. The DOL no longer believes making the filings via regular mail or personal delivery is efficient or cost-effective, and noted that it annually receives approximately 2,000 top hat plan statement filings. To make the information on these statements accessible, the DOL has been converting the paper filings to electronic format. Apparently, the DOL wishes to save itself from that work in the future in a way that should not impose undue burdens on plan administrators. Under the proposed regulation as currently drafted, electronic filing for all new top hat plans would become mandatory 120 days after the final regulation is published in the Federal Register. Filings with the DOL via mail or personal delivery no longer would be acceptable.
On the same day the proposed regulations were issued the DOL launched a new web-based filing system for the notices described above, which can be found here. Use of this new system is voluntary pending the adoption of a final regulation, but the DOL stated it will treat plan administrators who use the new system as having satisfied the requirement to provide the statement.
The preamble to the proposed regulations states that these new filing rules are not intended to change the content requirements for top hat statements. Of course, an email address would have to be provided with electronic filings (email addresses are not currently required). If adopted, the electronic filing process would include an email confirmation back to the plan administrator that the filing has been received. All filed statements would be posted on the DOL’s website.