Cherry Park Advisory

One nuance here is making sure you’re applying the current participant-count methodology. For defined contribution plans, the determination is generally based on participants with account balances at the beginning of the plan year. If there are 105 participants with account balances and the plan otherwise meets the Form 5500-SF requirements, the plan would still be treated as a small plan. Of course, you’d also want to confirm the plan satisfies the other Form 5500-SF eligibility conditions.

One thing to watch for is that a plan termination date and a final Form 5500 filing date are not the same thing. Even though the plan terminated in 2023, a final Form 5500 generally isn’t filed until all assets have been distributed and the termination process is complete. In this case, because distributions weren’t completed until 5/31/2024, you’d typically have a short plan year final return for 2024.

Something like: I generally agree with Effen’s distinction that the delinquent 5500s and the missed MRC/Form 5330 issues are separate compliance tracks. From a practical perspective, I wouldn’t want the plan sponsor waiting to clean up one before addressing the other. My bigger concern would be understanding the full scope of the funding-related compliance implications after three years of missed MRCs. Beyond the 5500s and excise taxes, I’d want the actuary to assess AFTAP certifications, PBGC premiums and filings, Annual Funding Notices, Schedule SB reporting, and any potential benefit restrictions that may have applied during the period. At that point, the late 5500s may be the easiest part of the remediation effort.

I’d add one other consideration: if the plan transitioned from a group annuity to mutual funds during the plan year, it’s worth confirming whether any assets were invested in a direct filing entity (CCT/CIT, PSA, MTIA, or 103-12 IE) at any point before the conversion. Schedule D is based on investments held during the reporting year, not just at year-end. If the plan was invested solely in registered mutual funds for the entire year, then Schedule D generally would not be required.

I’d add one other consideration: if the plan transitioned from a group annuity to mutual funds during the plan year, it’s worth confirming whether any assets were invested in a direct filing entity (CCT/CIT, PSA, MTIA, or 103-12 IE) at any point before the conversion. Schedule D is based on investments held during the reporting year, not just at year-end. If the plan was invested solely in registered mutual funds for the entire year, then Schedule D generally would not be required.