Termination in 2009

[Below Ground]

Plan is a small profit sharing plan. It is expected that termination and trust liquidation will be completed any day now. Can we use 2008 paper forms (marked as for 2009) for last 5500, or must we wait until the electronic version for 2009 is available?

[TPAMan]

I have always used the most recent form available, which in your case would be the 2008 5500 forms. I believe you aer required to file the final 5500 within 7 months of the final distribution which means that the 2009 fomrs may not even be available in time.

[rcline46]

Read the instructions for the 2009 forms. Yes they are available. This option is not permitted under the current version of the 2009 forms.

[Below Ground]

Rcline, as I understand the 2009 5500 Forms will only be allowed to be filed under EFast2 System. That system will not be available until 1/1/2010. As I also understand, software vendors can't even be "certified" until August of this year. I suspect that I was not clear with my OP, leading to the answer you provided.

To clarify my question, I have a small profit sharing plan that uses the calendar year for plan year. This Plan was terminated earlier this year (2009). At this time the benefits are being paid out, meaning the trust will be liquidated very soon. My question is....

Do I need to wait until the EFast2 Systems is up and running, or is there a way I can file the 5500 Forms for 2009 at this time?

I do thank you both for your replies, and also appreciate comments toward this post.

[rcline46]

The way I understand the instructions, you must wait for the 2009 forms and cannot 'mark up' a 2008 form. YOu must wait until sometime in 2010 to file.

I sure hope they give us a paper option!

[Below Ground]

Rcline - Me too, but it doesn't look that way.

[Bird]

I attended a Ft William webinar on this and they cited final DOL regs on electronic filing, saying the paper option was available until EFAST2 becomes operational.

regs

[rcline46]

The only delay I found in that mess is electronic filing is required for all reporting years beginning on or after January 1, 2009. Did anyone see anything else?

[BG5150]

Why not just send it in using the 2008 forms now and wait to see if they come back to you with a letter? You will at least have a record of sending timely.

[Below Ground]

BG5150 - Sounds like a good plan to me!

[PJ2009]

Why not just send it in using the 2008 forms now and wait to see if they come back to you with a letter? You will at least have a record of sending timely.

This sounds like a reasonable, good-faith solution to me. If necessary, you can re-file in 2010.

[Belgarath]

From the Federal Register, Volume 72, No. 221/Friday, November 16, 2007/Notices. Emphasis is mine.

Short plan year filings for 2009 plan years and filings for DFEs for 2009 reporting years will be subject to a special transition rule. The instructions to the Form 5500 Annual Return/Report advise filers that the due date for their Form 5500 for a plan year of less than 12 months (short plan year) is the last day of the 7th month after the short plan year ends. For purposes of determining the filing deadline, the instructions state that a short plan year ends on the date of the change in accounting period or upon the complete distribution of assets of the plan in the case of terminated or merged plans. For DFE filings, the instructions provide that DFEs (other than GIAs) must file 2009 return/reports no later than nine and one half months after the end of the DFE year that ended in 2009, and the 2009 Form 5500 must report information for the DFE year (not to exceed 12 months in length). The Agencies historically have permitted short plan year filers and DFEs to use the prior year’s forms if the current year forms are not available by the plan's or DFE's filing due date. The Agencies expect that, in some cases, filings for 2009 short plan years and DFE filings for 2009 reporting years (e.g., if the DFE year differs from the 2009 calendar year) may be due during 2009 and before the January 1, 2010, date on which the new EFAST2 wholly electronic filing system is expected to become operational for return/report filing purposes.

Plans filing for 2009 short plan years and DFEs filing for 2009 reporting years will have the option of using the 2008 Form 5500 Annual Return/Report forms and filing for 2009 under the current EFAST filing system if they file before the date the new EFAST2 electronic filing system becomes operational.

Alternatively, plans whose due date for their 2009 short plan year filing and DFEs whose due date for their 2009 reporting year filing falls before the new EFAST2 system becomes operational but who want to file electronically under the new EFAST2 system will be granted an automatic extension until after the EFAST2 system becomes operational in which to file. The Agencies intend to describe the terms and conditions for the automatic extension in the instructions for the 2008 Form 5500 Return/Report.

http://www.dol.gov/ebsa/regs/fedreg/notices/20071116.pdf

[Below Ground]

Perfect! Thanks.

[chc93]

After reading the Federal Register again, it appears that the option to use the 2008 Form 5500 is available only if the DUE DATE of the 2009 Form 5500 is prior to EFAST2 becoming operational. That is, if all assets are distributed in Oct 2009, the due date is not until May 2010, and if EFAST2 is operational by then (expected to be on 1/1/2010), then a 2008 Form 5500 cannot be filed, say in Nov 2009. Am I reading too much into this?

[Bird]

Where do you see that? (I actually couldn't find that, or what both Belgerath and I cited, in the link we both provided, so I'm somewhat confused.)

But, I did find this (my emphasis):

Under the Department of Labor’s Final Rule on Annual Reporting and Disclosure, all Plan Year 2009 and later Form 5500 Annual Returns/Reports must be filed electronically. 2009 Short Plan year filers whose due date is before January 1, 2010, are granted an automatic 90-day extension from the date the EFAST2 system is available for filing, but may file on paper using the 2008 forms and schedules if filed on or before December 31, 2009. Late and amended Annual Returns/Reports for plan years before 2008 must be submitted electronically once the EFAST2 system is available for filing. Plan Year 2008 filings (including late and amended filings) can be submitted electronically using EFAST2 beginning on January 1, 2010, electronically using EFAST until June 30, 2010, or on paper until October 15, 2010; 2008 filers with late or amended filings after January 1, 2010 are encouraged to file electronically using EFAST2.

here:

http://efast.dol.gov/about_efast2.html

[chc93]

Where do you see that? (I actually couldn't find that, or what both Belgerath and I cited, in the link we both provided, so I'm somewhat confused.)

But, I did find this (my emphasis):

Under the Department of Labor’s Final Rule on Annual Reporting and Disclosure, all Plan Year 2009 and later Form 5500 Annual Returns/Reports must be filed electronically. 2009 Short Plan year filers whose due date is before January 1, 2010, are granted an automatic 90-day extension from the date the EFAST2 system is available for filing, but may file on paper using the 2008 forms and schedules if filed on or before December 31, 2009. Late and amended Annual Returns/Reports for plan years before 2008 must be submitted electronically once the EFAST2 system is available for filing. Plan Year 2008 filings (including late and amended filings) can be submitted electronically using EFAST2 beginning on January 1, 2010, electronically using EFAST until June 30, 2010, or on paper until October 15, 2010; 2008 filers with late or amended filings after January 1, 2010 are encouraged to file electronically using EFAST2.

here:

http://efast.dol.gov/about_efast2.html

in the second line above..."2009 Short Plan year filers whose DUE DATE is before January 1, 2010..." (emphasis mine). So, if your due date is after Jan 1, 2010 and EFAST2 is available, it appears that paper filing using 2008 forms are not possible. That is, if your due date is before Jan 1, 2010, but it is a Jan 1, 2009 plan year (short year), the 2009 Form 5500 cannot be filed on time without this exception to use the 2008 forms (or the 90-day extension after EFAST2 is available). But if your due date is after Jan 1, 2010, you will be able to file using EFAST2 within your due date, and this exception will not apply. Make sense?

[Bird]

Yes, that's how it appears to read. I can see doing an "oops" on the last day of the short year if gets the due date in 2009.

As far as I can tell, this is only on the website, not in the Federal Register?

[chc93]

Yes, that's how it appears to read. I can see doing an "oops" on the last day of the short year if gets the due date in 2009.

As far as I can tell, this is only on the website, not in the Federal Register?

I got this link from belgarath's post above...

http://www.dol.gov/ebsa/regs/fedreg/notices/20071116.pdf

Look on page 64733, middle column, about half-way down.

"The Agencies expect that, in some cases, filings for 2009 short plan years and DFE filings for 2009 reporting years (e.g., if the DFE year differs from the 2009 calendar year) may be due during 2009 and before the January 1, 2010, date on which the new EFAST2 wholly electronic filing system is expected to become operational for return/report filing purposes. Plans filing for 2009 short plan years and DFEs filing for 2009 reporting years will have the option of using the 2008 Form 5500 Annual Return/Report forms and filing for 2009 under the current EFAST filing system if they file before the date the new EFAST2 electronic filing system becomes operational. Alternatively, plans whose due date for their 2009 short plan year filing and DFEs whose due date for their 2009 reporting year filing falls before the new EFAST2 system becomes operational but who want to file electronically under the new EFAST2 system will be granted an automatic extension until after the EFAST2 system becomes operational in which to file."

The federal register doesn't quite sound as clear as the dol website you posted, which is why I asked the question. The 1st and 3rd sentences appear to reference the "due date", but the 2nd sentence doesn't reference the "due date"... in fact, taken by itself, the 2nd sentence appears to allow any 2009 short year to use the 2008 Form 5500.

We have a few of these situations, and were hoping to be able to use the 2008 Form 5500 before Dec 31, 2009... get it done now, and avoid EFAST2.

[Bird]

Look on page 64733, middle column, about half-way down.

Thanks, I don't know why I couldn't find it.

I agree, the regs seem to say you can file on paper before 12/31/09, even if the due date is later. But the website seems to limit the paper option only to those with due dates before 12/31. I don't think they meant that, at least I hope not, because I too would like to get rid of them. We'll probably do paper filings unless they come back and say they really, really meant it.

[chc93]

I just got this from the Sungard Relius technical updates...

http://www.relius.net/News/TechnicalUpdates.aspx?ID=468

**************

Short 2009 plan years. The 2008 Form 5500 instructions indicate that plans with a 2009 short plan year which have a 5500 filing deadline before January 1, 2010, may file a paper 5500 using the 2008 forms or are eligible for an automatic extension of 90 days following the date electronic filing becomes available. The result of this policy is that plans with short years having a deadline after December 31, 2009 (e.g., plans which terminate after May 31, 2009) have no option but to wait for electronic filing. DOL and IRS officials seemed surprised by this result and indicated that the DOL will not reject a paper filing for any plan with a short 2009 plan year, regardless of its deadline.

**************

Looks like the 2008 Form 5500 paper filing will be accepted... in all cases regardless of the deadline/due date. (amazing that DOL was surprised, when they are pretty explicit on their website summary)

[Bird]

Sounds good, thanks for the update!

[chc93]

Sounds good, thanks for the update!

Well, I just got another update from Sungard Relius...

http://www.relius.net/News/TechnicalUpdates.aspx?ID=470

Generally, they reinforce the Form 5500 instructions that a plan with a filing *deadline* after Jan 1, 2010 cannot use the 2008 Form 5500 paper filing before Dec 31, 2009. However, they go on to say that...

*****************

A DOL official indicated to us that it probably would not reject a paper filing for a short 2009 plan year whose filing deadline is after December 31, 2009, but which is submitted by December 31, 2009. However, a preparer should alert their client there is an element of risk to this strategy.

*****************

I guess we can still file the 2009 short plan year using the 2008 Form 5500 paper filing by Dec 31, 2009, but there is "an element of risk"???

[Bird]

I saw that. Well, they're getting the paper filings, at least from my clients.