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8955-ssa related


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Hi

I am no expert on 8955-SSA but was having a discussion with a TPA.

Whenever there is a termination of a participant and the participant is not paid out by the end of the plan year following termination, I file 8955-SSA, regardless of plan type. I have always known this way.

The discussion is about the "deferred benefit" which the TPA stated that is only applicable when the benefit/account balance is not due till NRA i.e. plan does not pay benefits till NRA.

Also, TPA stated that if only a 401k/safe harbor plan, does not need to file 8955-SSA (all benefits are 100% vested at all time). Is this correct per instructions "Plan administrators of plans subject to the vesting standards of section 203 of ERISA must file Form 8955-SSA."?

Are there any situations where 8955-SSA is not required to be filed for any qualified DC and/or DB plans? Let's leave 403b plans out and this is a question for DC or DB plans. Terminated participants may have partial or full vested benefits.

Does it matter if the DC plan is a money purchase plan or a profit sharing plan where the normal form is J&S?

What am I missing here?

Thank you

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2 hours ago, Jakyasar said:

Also, TPA stated that if only a 401k/safe harbor plan, does not need to file 8955-SSA (all benefits are 100% vested at all time). Is this correct per instructions "Plan administrators of plans subject to the vesting standards of section 203 of ERISA must file Form 8955-SSA."?

Is the claim here that a plan is not subject to the vesting standards of ERISA as long as all contributions under the plan are 100% vested? Isn't that a little like saying that I'm not subject to laws against murder because I've never killed anyone?

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my belief is that the intention of the form 8955-SSA was so that participants who had not taken distribution of their plan account (for whatever reason) are notified of said account when they reach retirement age and apply for their Social Security Benefit.  I've read many of the letters these participants receive from the Social Security Adminirtration when they apply for SS and it is indicated that they "MAY" have a benefit in said Plan.

That being said, I suppose the semantics of a participant having a "deferred vested benefit" could lend itself to mean that either they couldn't yet take the benefit when they left (if only payable at NRA) or that they actively deferred their benefit until a later date and not that it was available to them earlier and they just didn't take it.

However in practice I was always taught and assumed as Jakyasar says that you report anyone entitled to a benefit that has not yet taken that benefit (within the form parameters).

 

 

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Not a lawyer here, but… ERISA Section 203(a)(1) says that the vesting requirements are met if employee’s contributions are nonforfeitable. And 203(a)(2)(B) says that an individual account plan must meet the minimum vesting schedule. That sounds to me like Section 203 is governing vesting for the 401(k)/safe harbor plan that TPA is referring to. Code Section 6057 says the Plan Administrator is to report participants who separated from service during the plan year, so I don’t see how waiting years for the terminated participant to reach NRA would be correct.

 

I believe the standard industry practice is what Jakyasar been doing – reporting them in the following year (and we have standard practices for a reason). My experience in 25 years is that’s what TPAs do. I think it is that TPA Jakyasar is talking with who is missing something.

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