Summary Annual Report & Employee-Directed

[Lynn Campbell]

If all Plan investments are directed by participants, is there any change in the requirement to distribute the Summary Annual Report? In very small Plans, the SAR effectively discloses the key EE's account balance, and I am getting increased resistance from the key EE on doing this. Any similar reaction, any solution?

[Guest]

[richard]

Unfortunately, I'm not aware of any exception to the SAR requirement.

Worse yet, consider a two participant DC plan. With even a modest level of intelligence, the non-owner employee can calculate the owner's pay exactly if it is under $160,000, or can determine that it is somewhere over $160,000 otherwise.

I wouldn't be surprised that some business owners simply do not provide SARs to their employee in these cases, law and penalties notwithstanding, even if the actuary or TPA provides the SARs to the owner.