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MPP PSP Merger / 5500


Guest ElKH

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I am completing the 5500 for a MPP Plan which is in the process of being merged with the PSP. The merger was effective December 27, 2002, but the assets themselves weren't reclassified/transferred until 2003.

For reporting purposes, do I consider the MPP a "frozen" plan for 2002? We did not go through a plan termination, we passed a merger resolution, so I assume we do not report that a resolution to terminate the plan was passed . . . ?

I'm just feeling like we need to make note somewhere in the 5500 that something's happening, because, of course, we are reporting no contribution on the Schedule R.

Thanks.

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Although the money purchase pension plan was merged into the profit sharing plan at the end of 2002, this does not mean that there is not a required contribution to the MPP for the 2002 Plan year (assumes calendar year plan year). Appropriate resolutions, amendments and participant notices should have been implemented prior to participants accruing a benefit for the 2002 plan year.

...but then again, What Do I Know?

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Was the money purchase contribution for 2002 deposited into the profit sharing plan during 2003? If you're reporting the money purchase on the accrual basis, the contribution would show up in income on the 2002 Form 5500, and the asset would be a contribution receivable. It shouldn't matter that the contribution wasn't received until after merger.

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The client made no contribution to the MPP for 2002. The MPP had a last day rule, so no contribution had accrued prior to the plan merger.

So really, my issue was that we hadn't officially transferred any funds or had the accounts renamed or anything as of December 31.

Are you saying that because the resolution had been timely executed, that essentially the funds were considered "profit sharing" as of December 27 . . . and the 2002 5500 would be the last filing . . . and I would show a "transfer" of assets out of the plan (even though no actual movement had taken place)?

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