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Code C on 8955-SSA


austin3515

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Code C Purpose: "Use this code for a participant previously reported under the plan of a different plan sponsor and who will now be receiving a future benefit from the plan reported on this form. Also complete columns (b), (c), (h), and (i)."

So a client is merging Plan A into Plan B.  Plan A happened to be an employee contribution only and Plan B happened to be Employer contributions only.  Both are sponsored by the same plan sponsor.  Based on the instructions above, I am planning on NOT reporting these folks as a Code C on the surviving plan.

Do we all agree?

Austin Powers, CPA, QPA, ERPA

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No matter the original source of contributions, isn't the payment "from the plan"?

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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1 hour ago, austin3515 said:

Ahh, ok, I see "will now be receiving future benefits from this plan" BUT the first word before that phrase is AND.  And it's not a different sponsor so it doesn;t apply?

I'm not so sure that is correct, but the wording in the instructions contradict the wording on the Form 8955-SSA itself so it isn't 100% clear.

The Form itself says "Code C — has previously been reported under another plan, but who will be receiving benefits from the plan listed above instead."

To limit it to a plan of another sponsor doesn't make much sense since the 8955 is plan specific.   Code C simply signals to SSA to transfer the previously reported benefit (a P with code A in prior years) to a new plan so that they can reference the correct plan when they send their "you may have a benefit" letter out.

If the balance of a participant who has been a code A in the past is going to be paid out from plan 002 rather than 001, the participant should be a code C for 002 and a code D for 001.  So no need to use code C for anyone who was not a code A in the past.

 

 

 

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19 hours ago, austin3515 said:

You're joking, right?

I wish. See below (emphasis mine) 

Code D - Use this code for a participant previously reported under the plan number shown on this form who is no longer entitled to those deferred vested benefits. This includes a participant who has begun receiving benefits, has received a lump-sum payout, or has been transferred to another plan (for example, in the case of a plan termination). Also complete columns (b) and (c). Participants should not be reported under Code D merely because they return to the service of the plan sponsor.

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