File 5500?

[Guest Brenda Schachle]

Years ago we took over a MPPP (Plan A) for a development authority whose document indicated that it was a corporation. We have always filed a 5500. Recently we discovered that the plan sponsor should have been indicated as a Govt entity all along. Are we required to file a 5500 for this plan? How do we discontinue the filings since the assets will not go to zero? (This plan underwent an IRS audit a few years ago with few questions and no problems indicated). To complicate matters, this entity was merged with another govt entity who had a MPPP (Plan B) that has never filed a 5500. Should the old entity have been filing a 5500? -- the prior administrator says no since it is a Govt Plan. Not sure what to do with this this since no plan B 5500 to show merged into Plan A 5500. Any suggestions?

[david rigby]

Sounds like that merger has given you a gift: an excellent opportunity to stop filing as well as a great way to explain it to the EBSA. Just to be sure, you may want to search the 5500 instructions and/or the EBSA and IRS websites for any guidance (likely, you are not the first to have this problem).

[mbozek]

Years ago we took over a MPPP (Plan A) for a development authority whose document indicated that it was a corporation. We have always filed a 5500. Recently we discovered that the plan sponsor should have been indicated as a Govt entity all along. Are we required to file a 5500 for this plan? How do we discontinue the filings since the assets will not go to zero? (This plan underwent an IRS audit a few years ago with few questions and no problems indicated). To complicate matters, this entity was merged with another govt entity who had a MPPP (Plan B) that has never filed a 5500. Should the old entity have been filing a 5500? -- the prior administrator says no since it is a Govt Plan. Not sure what to do with this this since no plan B 5500 to show merged into Plan A 5500. Any suggestions?

Because Gov. plans are statutorily exempt from ERISA no filiing requirement/or penalties can be enforced against the plan, even if 5500 were filed in prior years. Best thing is to notify the DOL that 5500s were filed in error and that no further 5500s will be submitted in future years. I dont know if DOL will acknowledge and remove plan from list. You may get penalty notices from the IRS in the future and have to deal with a complicated process to remove plan from list of 5500 filers.