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The Schedule A form uses the word “paid” 31 times. It has one mention of “accrual”, only for counting retention charges on an experience-based contract. And nothing in the Schedule A portion of the Form 5500 Instructions uses the word “accrual” (except to describe a benefit-responsive contract held by an individual-account retirement plan). Not mentioning a choice of accounting methods for Schedule A might have been a considered choice. For example, the Schedule C instructions say: “Either the cash or accrual basis may be used for the recognition of transactions reported on the Schedule C as long as you use one method consistently.”

I would report it on the schedule A for 2020. That's when it was paid. To be completely honest, I don't get too worked up over Schedule A's - while others may have a different opinion, I have NEVER, in 36 years in this business, had anything on a Schedule A questioned or investigated.

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?

Somewhere along the line, somebody added him to the SSA (now Form 8955-SSA) and didn't remove him when the account was paid out. The $49k was the value of his account when the sponsor (or, really the TPA or R/K) added him tot he SSA way back when...

Form 8955-SSA. It was called something else once upon a time but that's the current form to report terminated employees with deferred vested benefits. When participant applies for Social Security they get that notice if they were reported to SSA unless they were later removed. But in my experience it's been hit or miss that they actually get removed when you report code D. maybe it's got better in recent years but the old days it seemed like over half the folks who were "removed" still got the letter.

Notice 2020-68, Q&A D-12

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).

What's the harm in answering line 4? Why wouldn't you do it?

That's what I suggested way back at the beginning.