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Form 8955 SSA required for ESOP


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Is the SSA required to be filed for ESOPs? Recently took over an ESOP plan. Looking at the census there are quite a few employees who terminated in prior years and still carry a balance (which would be expected in an ESOP). Some of these participants where reported on SSA but most were not, which made it confusing. Working on the 2009-2010 plan years not and want to make sure everyone is reported, if needed.

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The simple answer is the rules for an ESOP and any other DC plan for this form are the same.

On a practical level you haven’t given enough information to determine if what you are seeing is a result of the correct application of the rules or a mistake.

The important thing to remember is you are not required to report someone who is in payment status. So look and see are the people who were not reported are they getting a series of payments? If so, that would most likely be correct. Likewise, are the people who have been reported still waiting for their first payment?

The next question is when to give a person who was reported as an “A” and then starts payment should be made a “D”. I think a strict reading of the instructions would say the year of first payment. However, people around this firm like to wait until the full balance has been paid.

I have a somewhat related question for the group. We have a number of ESOPs that require one to wait 5 years before payment starts. The distribution form and the participant statement appear to meet the requirements for the notice you need to give a person as part of form 8955-SSA question 8. In this case one isn’t going to give a distribution form to the person for 5 years.

What is the statement, letter, form you are giving out to meet this requirement look like?

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