SSA--When to report as "D"

[jkharvey]

401k/Profit sharing plan that does not have Annuity as normal form of benefit. A participant that terminates in a prior year (for example 2009) and was properly reported on an SSA receives a partial distribution in 2014. Is that partial payment considered as having "begun receiving benefits" for purposes of reporting them in 2014 as code D?

[Bird]

I'd say "no." I think the language for removing them says something to the effect of "...no longer entitled..." and they are still entitled to something.

[david rigby]

Don't overthink it. What is the purpose of the SSA? to let the SSA remind a former participant of a (possibly forgotten) prior benefit. If such benefit still exists, let it ride.

[Tom Poje]

well, the instructions for someone who hasn't been reported says 'isn't required to report them' (as an A) if they have been paid 'some' of their benefit.(but I have never followed that instruction I guess using the same logic (though logic never applied to any of these of forms), since they have been paid some or all of their benefit you 'could' report them as a D.

I'm not quite sure when condition 3 arises, except maybe for a lost participant.

A participant who has not been previously reported is not
required to be reported on Form 8955-SSA if, before the
date the Form 8955-SSA is required to be filed (including
any extension of time for filing), the participant:

1. Is paid some or all of the deferred vested retirement
benefit (see the Caution below),
2. Returns to service covered by the plan and/or
accrues additional retirement benefits under the plan, or
3. Forfeits all the deferred vested retirement benefit.

That being said, I have always waited until someone is fully paid out before reporting them as a D

[ESOP Guy]

I think you can put a D. Here is how I would decide.

If the partial payment is part of a series of payments-- even if not an annuity I put the D. It is common for ESOPs to pay people over 5 years. I put the D after the first payment.

If the partial payment was a one time event I would not report the D to try and help the person get a reminder they are do more in the future.

We have a fair amount of debate around here on ESOPs and the 1st of the 5 or the 5th of the 5. Also, of the 5 stops do you put a new A out there or not.

I have yet to see a fine for a bad code so I think anything reasonable will work. Be consistent.