Annual Reporting and Disclosure

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on July 11, 2023

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What Is Annual Reporting and Disclosure?

Annual reporting and disclosure refer to the process of providing essential financial information and other relevant data about a company, organization, or financial product, such as a retirement plan, to stakeholders, regulators, and the public.

This information is typically presented in the form of annual reports, which include financial statements, management's discussion and analysis (MD&A), and notes to the financial statements.

These reports aim to offer transparency, ensure compliance with regulatory requirements, and help stakeholders make informed decisions.

In the context of retirement planning, annual reporting and disclosure are crucial for understanding a retirement plan's financial health, investment performance, and overall stability.

Regulatory bodies like the Securities and Exchange Commission (SEC), Employee Retirement Income Security Act (ERISA), Internal Revenue Service (IRS), and Department of Labor (DOL) enforce various reporting and disclosure requirements to maintain transparency and protect the interests of plan participants.

Regulatory Requirements and Standards for Annual Reporting and Disclosure

Securities and Exchange Commission (SEC) Regulations

The SEC enforces several regulations that mandate annual reporting and disclosure for publicly traded companies and some retirement plans.

The primary forms required are the annual Form 10-K, which provides a comprehensive summary of a company's financial performance, and the quarterly Form 10-Q, which contains unaudited financial statements and updates on a company's financial performance between 10-K filings.

Employee Retirement Income Security Act (ERISA) Requirements

ERISA establishes reporting and disclosure requirements for private-sector retirement plans.

Some key requirements include providing participants with an annual funding notice about the plan's funding status and a summary annual report that furnishes participants with a summary of the plan's financial condition.

Other Applicable Regulations

The Internal Revenue Service requires retirement plans to file Form 5500, which provides information on the plan's financial condition, investments, and operations.

The Department of Labor enforces regulations related to retirement plan administration, including rules on annual reporting and disclosure.

Retirement Plan Types and Annual Reporting and Disclosure

Defined Benefit Plans

Defined benefit plans promise participants a specific monthly benefit at retirement.

These plans' annual reporting and disclosure requirements include Pension Benefit Guaranty Corporation (PBGC) premium filings, and actuarial valuation reports that provide information on the plan's funding status and actuarial assumptions.

Defined Contribution Plans

Defined contribution plans, such as 401(k), 403(b), and 457(b) plans, as well as Individual Retirement Accounts (IRAs), base retirement benefits on the participant's account balance.

These plans' annual reporting and disclosure requirements typically include Form 5500 and other ERISA-mandated disclosures.

Key Components of Annual Reports and Disclosures

Financial Statements

The balance sheet provides a snapshot of the plan's assets, liabilities, and equity at a specific point in time. The income statement shows the plan's revenues, expenses, and net income or loss over a specified period.

The cash flow statement details the plan's cash inflows and outflows from operating, investing, and financing activities.

Lastly, the statement of changes in equity reports changes in the plan's equity, including contributions, investment gains or losses, and benefit payments.

Management's Discussion and Analysis (MD&A)

The MD&A provides an overview of the plan's financial performance and any significant events that affected it during the reporting period.

This section also discusses potential risks and uncertainties that could impact the plan's future performance and provides insights into the plan's prospects, including any anticipated changes to investments, funding, or benefits.

Notes to the Financial Statements

These notes explain the plan's accounting principles, methods, and estimates used to prepare the financial statements.

They may also include information about events that significantly impacted the plan's financial position, such as changes in plan design or amendments, and disclose any potential liabilities that may arise depending on the outcome of uncertain future events.

Key Components of Annual Reports and Disclosures

Understanding Annual Report Disclosures for Retirement Planning

Plan Funding Status

The funded ratio compares the plan's assets to its liabilities, providing insight into its financial health. Unfunded liabilities occur if the plan's liabilities exceed its assets, which may affect its ability to pay promised benefits.

Investment Performance

Annual reports disclose the plan's investment returns, which can help participants assess the plan's performance relative to benchmarks or other plans.

The plan's investments are typically divided among various asset classes, such as stocks, bonds, and cash. Understanding the plan's asset allocation can help participants gauge the plan's risk profile and diversification.

Plan Expenses

Administrative fees cover the plan's costs, such as recordkeeping, legal, and accounting services. Investment management fees are charged by the investment managers who oversee the plan's assets.

Evaluating Retirement Plan Providers with Annual Reporting and Disclosure

Factors to Consider

When evaluating retirement plan providers, consider their reputation for delivering quality service, investment options, and performance.

Assess the variety and quality of investment choices offered by the provider, and compare the provider's fees and expenses with industry benchmarks and competitors.

Comparing Annual Reports and Disclosures

Benchmarking lets you compare the plan's performance, fees, and expenses with industry benchmarks or similar plans. Evaluate the plan's historical performance to identify any trends or fluctuations in performance.

Tips for Using Annual Reports and Disclosure in Retirement Planning

Staying Informed

Stay current on your retirement plan's performance, fees, and other important information by regularly reviewing annual reports and disclosures. Monitor your plan's investment returns and compare them to benchmarks or other plans to ensure your retirement goals remain on track.

Making Adjustments

Periodically review and adjust your portfolio to maintain your desired asset allocation and risk tolerance. Evaluate your risk tolerance as you approach retirement and adjust your investments accordingly.

Seeking Professional Advice

Consult with a financial advisor to review your retirement plan and provide personalized advice based on your financial goals and risk tolerance.

Seek the guidance of retirement plan consultants to review your plan's performance, fees, and compliance with regulatory requirements.

Tips for Using Annual Reports and Disclosure in Retirement Planning


Annual reporting and disclosure are crucial elements in retirement planning, as they provide valuable insights into a plan's financial health, investments, and performance.

Understanding regulatory requirements from organizations like the SEC, ERISA, IRS, and DOL is essential for compliance.

It is important to be familiar with the reporting and disclosure requirements for different retirement plan types, such as defined benefit and defined contribution plans.

Evaluating key components of annual reports, including financial statements, MD&A, and notes to the financial statements, can help you assess your plan's funding status, investment performance, and expenses.

Comparing and benchmarking annual reports and disclosures can guide you in selecting the right retirement plan provider. Staying informed, making adjustments, and seeking professional advice are vital steps to ensure your retirement planning remains on track.

You can make informed decisions and secure a stable financial future by actively monitoring your plan's performance and leveraging annual reports and disclosures.

Annual Reporting and Disclosure FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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