Form 5500 updates coming ‘very soon,’ says EBSA’s Borzi

When the Department of Labor’s fiduciary rule was released in April it created a stir among financial professionals, many of whom said it would do small savers and businesses a disservice.

“Opponents continue to insist that the result of the rule will be small savers not getting advice, but the dirty little secret … they don’t get advice now,” said Phyllis Borzi, assistant secretary of labor, speaking this week at the International Foundation of Employee Benefit Plans’ Washington Legislative Update.

There are a lot of people who never seek advice – they either do it themselves or rely on the default options in their company-sponsored 401(k) plans which may or may not be the right thing for them, she added. “We think in the long term, people will feel more comfortable getting advice because those giving it are legally obligated to give it,” she said.

And between now and Jan. 1, 2018, when the full rules go into effect, employers can expect further technical guidance, she said.

Borzi also hinted that employers can expect to see updates to Form 5500s “very soon.”

She said these changes will be much more “substantial” than the previous few updates, which were more procedural, and will help fill many of the data gaps that currently exist.

“There are lots of gaps in information we’ve tried to address,” she said, adding that once released, there will be a lengthy comment period for stakeholders.

Sick leave was also on the agenda at the IFEBP event. Diana Bardes, an attorney with Mooney, Green, Saindon, Murphy & Welch, urged employers to remain aware of current laws at the local level.

Some of the recent municipalities passing paid sick leave laws include San Diego, Eugene, Oreg., New York City, San Francisco, Seattle, Jersey City and Washington, D.C.

Additionally, some states like Connecticut and Massachusetts have passed paid sick leave laws. However, many states are not on board, she noted, with some states like Louisiana and Wisconsin passing preemptive laws banning municipalities from passing such legislation.

Many argue that paid sick leave will increase costs to employers and many are worried the benefit could be abused, said Bardes. However, she also noted that data from Connecticut shows 45% of businesses reporting no change in costs and another 17% only reporting a slight increase of 2%.