If you’re an employer offering various employee benefit plans, it's essential to understand your responsibilities regarding compliance and taxes. If the federal government requires your organization to file Form 5500 with the Department of Labor (DOL) for your benefit plan, you must also deliver the Summary Annual Report (SAR) to plan participants.
The SAR is relatively simple to fill out once you’ve completed Form 5500. However, some employers may not be aware that the federal government requires it and could face costly penalties if they fail to distribute it.
This article explains what the SAR is, who must complete it, and how you should provide it to your employees.
In this blog post, you’ll learn:
- What the Summary Annual Report (SAR) is, how it relates to Form 5500, and why ERISA requires you to provide it for certain employee benefit plans.
- Which employers and benefit plans must distribute the SAR, which plans are exempt, and who must receive the report annually.
- What information the SAR must include, and the penalties employers may face for failing to distribute it to their employees.
The SAR is an annual summary of important information on Form 5500 for benefit plan participants and beneficiaries. This document gets its name from Form 5500, also known as the Annual Report.
Not only does the SAR summarize each year’s Form 5500, but it also provides transparency by keeping covered individuals informed of their plan’s financial health on an annual basis. Additionally, it outlines their rights to certain information as a participant in the benefit.
Under the Employee Retirement Income Security Act of 1974 (ERISA), employers offering specific health and retirement benefit plans must file Form 5500 and distribute the SAR or be subject to penalties1.
ERISA-covered plans that require the filing of Form 5500 also require completion of the SAR.
These plans include:
Employers offering alternative health benefits, such as individual coverage health reimbursement arrangements (ICHRAs), group coverage HRAs (GCHRAs), and flexible spending accounts (FSAs), must also comply with ERISA, Form 5500, and SAR annual reporting requirements if they meet the minimum participant and funding thresholds.
Group health plans with 100 or more participants on the first day of the plan year must file Form 5500. Small plans with fewer than 100 participants can sometimes file Form 5500-SF instead2.
If you’re not required to file Form 5500, you don’t have to complete the SAR.
Plans exempt from Form 5500 include:
Welfare plans with fewer than 100 participants and small unfunded plans (where the employer pays all benefit claims using their general assets) are also generally exempt from SAR requirements.
The SAR is a summary of the information you included on Form 5500 for plan participants. If your plan doesn’t require you to include certain information on Form 5500, you don’t need to include it on the SAR.
Below is the basic information you must include on the SAR for health and welfare plans to comply with federal regulations3:
If you need to include extra information to accurately summarize your Form 5500, add it to the SAR with the heading “Additional Explanation.”
Plan administrators don’t need to file the SAR with the DOL, Internal Revenue Service (IRS), or other government agencies. Instead, you must provide it to all participants listed in the plan’s summary plan description (SPD) annually.
Benefit participants and beneficiaries include:
You must distribute the SAR to plan participants no later than nine months after the plan year ends, which is two months after the deadline to file Form 5500. For example, suppose your benefit is on a calendar plan year. In that case, the annual filing deadline for Form 5500 is generally July 31, and the SAR distribution deadline is September 30.
If you request and receive an extension of time to file Form 5500, you must distribute the SAR within two months after the extension period ends. For example, if you have a calendar year plan, the filing extension deadline for Form 5500 is October 15. This means the extended deadline to distribute the SAR is December 15.
Although you provide the SAR to plan participants for informational purposes only, you must prepare it using the proper style, format, and content requirements outlined by the U.S. Department of Labor. You must also ensure your distribution method results in the actual delivery of the SAR to your applicable employees.
Plan administrators can distribute the SAR using the following methods:
Additionally, all plan participants have the right to request a copy of the SAR at any time from the plan administrator.
Failing to distribute the SAR is a violation of ERISA regulations. If a plan participant or beneficiary requests a copy of the SAR and doesn’t receive it within 30 days of that request, you may incur fines of up to $110 per day until you provide them with a copy4. This is a per-occurrence fine for every employee who requests a SAR but doesn’t receive one within the 30-day timeline.
Employers who have filled out Form 5500 know it’s a challenging yet essential tax form to complete. Luckily, the SAR is less of a hassle to tackle. By following the guidelines in this article, you’ll be on your way to completing the SAR accurately, distributing it to plan participants, and avoiding penalties.
The annual reporting requirements can seem daunting if this is your first time offering employee benefits. If you need help filling out Form 5500 or the SAR, contact a tax advisor or a third-party administrator to help you complete both forms compliantly and answer any further questions.
This post was originally published on January 2, 2024. It was last updated on December 19, 2025.
This article is not intended as tax advice. Please consult with a licensed professional for assistance with understanding your specific Form 5500 and SAR obligations.