Summary Annual Report (SAR)

The SAR is the narrative summary of the financial information found on the IRS Form 5500 that must be distributed to all participants of the plan. If a plan is not required to submit a Form 5500, then it is also exempted from the SAR requirement. Compliance is mandated by law, and there are penalties for those who exercise willful noncompliance, with fines that could reach more than $100,000, imprisonment up to 10 years, or even both. The Department of Labor states that the SAR must be distributed within 9 months after the close of the plan year, which is 2 months after the Form 5500 is due. The information found in the SAR must include the plan expenses, the value of the assets of the plan, amount of plan contributions, as well as a section that lists a participant’s rights to additional information.

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