Schedule SSA

[Guest terid]

I have a profit sharing plan with a 6/30 plan year end. A participant who terminated 4/2003 will need to be reported on the SSA.

The question is what balance do we report? The vested balance at the time the participant was terminated or the vested balance at the end of the plan year?

[WDIK]

The instructions for Schedule SSA, line 4, box h, indicate that you should enter the value of the participant’s account at the time of separation.

If the account was not valued at the time of separation (for example the plan has a single valuation date) I would use the account balance as of the next valuation.

[wmyer]

I don't think it matters much -- here's the answer from the Panel Publishers 5500 book-- "As a practical matter, many plan administrators report the value of the vested account as of the last day of the plan year for which the Form 5500 report is being filed...." Although I agree with WDIK that it is not technically correct, you could use the 6/30/2004 valuation for this participant. Just be consistent from year to year in what you do.

[Blinky the 3-eyed Fish]

Many wrongs don't make a right. I would follow the instructions the best that you are able with the information available.

[Harwood]

The instructions for line 7i on Form 5500 state that "Code section 6057(e) provides that the plan administrator must give each participant a statement showing the same information reported on Schedule SSA for that participant." I know of no one who is giving participants a statement of the value of their account on their day of termination. For both Schedule SSA and for participants, a year-end valuation is the only realistic practice.

[Blinky the 3-eyed Fish]

Well let's not overstate it. Daily valued accounts are generally participant-directed accounts where the participant has access to the information himself, in effect providing his own statement. In balance-forward plans the participant gets a yearly statement that would too provide this information.

Now I didn't read the code section and this might not meet the strict criterion, but it's pretty close I imagine.

Also, I said follow the instructions the best that you are able. You are reporting a participant on the SSA if they terminated last year and haven't been paid out. It would be more accurate to use the EOY value in the year of termination rather than the current year's EOY value as "many plan adminstrators" are doing. I agree with being practical in the lengths that are taken to provide this information.

[david rigby]

Agreed. At its very basic level, the function of the SSA is to report the existence of some benefit. Don't forget to delete the participant on a subsequent SSA when paid out.

[pmacduff]

I heard a rumor that the SSA form was going to be "simplified" & the instructions made much clearer in regards to reporting participants initially & when paid out, etc. Anyone else hear such a thing?????

[WDIK]

I haven't heared anything that specific. I can't say that I look forward to a "simplification" of any reporting/disclosure form. The last time simplification ocurred, we got the Schedules D, R and T. (If my memory serves me, which is a highly dubious supposition.)