Lori Friedman

5500, But of course this information comes from DOL. Who else provides such esoteric and unconventional wisdom? Here's what's going on: 1. DOL is concerned about the reporting of investment assets vs. other plan assets. The issue relates to the exclusive purpose standard and whether fiduciaries are prudently investing plan assets. 2. If a plan is audited, DOL wants the GAPP classifications to be used on Schedule H. 3. Yes, Line 1c(1) clearly reads "interest-bearing cash". But, Line 1c is used exclusively to report assets held for investment. So, a non-investment cash account, which might happen to earn interest income, doesn't belong in this overall Line 1c bucket. Same thing for the income reported on Line 2b, which reports income from investment assets. 4. Line 1a is used for operating cash, whether interest-bearing or not. The line's instructions say to report "cash on hand or cash in a noninterest bearing...account" [emphasis added]. Any related interest goes on Line 1c. Sorry to make such a big deal about something that's usually inconsequential! As I mentioned before, this question's relevant for huge plans with material amounts of cash sitting in interest-bearing checking accounts. My apologies for boring anyone who doesn't work with such plans.

It's interesting that Schedule I provides such detailed instructions about how to report a reversion on Line 5a, yet there's no guidance whatsoever about reconciling Lines 1 and 2 for the very same transaction. I agree that a reversion isn't a Line 2k transfer, which has a clear definition. My best guess -- report the reversion as a Line 2h "other expense". If the number agrees exactly to the amount report on Line 5a, a reader can easily follow what you've done. If the numbers aren't the same (i.e. you lump the reversion with other plan expenses), attach an explanatory statement. Does anyone have a better idea?

Just in case anyone cares, I found the answer to my first question. All cash-on-hand (non-investment cash) gets reported on Line 1a as non-interest-bearing cash. Use this line even if the bank account is interest-bearing. Does this make sense? No. Is this weird and counter-intuitive? Yes. Why do I even care about this matter? I work with enormous multi-employer plans that have large amounts of cash-on-hand. The plans regularly pay significant amounts of benefits, so they need to maintain large non-investment, operating balances. The balances are material and, therefore, warrant all this attention.

jevd, L.P. must mean "likes to procrastinate" Elvis Costello I am an antique. I've never had Nintendo, but I'm old enough to remember Pong. Israel is really quite young. In terms of world history, it's probably equivalent to about age 18. Are you feeling better now?

Fair enough... I spent my 20's working on Capitol Hill but eventually went back to school and studied Accounting. I passed the CPA exam and began working in private accounting. I later got an M.S. in Accounting and switched to public practice. I've been with public firms for about 13 years now. The whole retirement/welfare area is sort of an offshoot. As soon as I began working in public accounting, I learned that CPAs are often required to work with benefits issues but lack the training to do so. Retirement and welfare benefit plans aren't taught in school, and they're not tested on the CPA exam. I decided to enroll in NIPA's APA program and get some comprehensive training and knowledge in those areas. I hang around BenefitLink to keep those skills sharp. I learn just by reading other people's questions and comments. Oh...and I also enjoy chatting with my friends AndyH, PATA, Blinky, Kirk, Denise, etc.

1. It's always been my understanding that assets held for investment (Line 1c) should agree to the investment assets reported on the audited financial statements. If you agree, what do you do with interest-bearing cash accounts that AREN'T classified as investment assets? For example, a plan's general operating accounts might be interest-bearing, but they're not investments. I've been putting these amounts in the catch-all bucket on Line 1e. Does anyone use a different approach? 2. When participant loans are secured by individual account balances, loans in default don't get reported on Schedule G or Schedule H. How do you handle the book/return difference for the defaulted loans? Where do you plug the amount on Line 2? 3. Is anyone else in October 17th hell? At this point, I'm probably over-thinking Form 5500 and not seeing things clearly.

This must be a tax-exempt benefits trust within the meaning of I.R.C. Sec. 501©(9)? If yes, how can the assets revert to the employer? Please see Reg. Sec. 1.501©(9)-4(d). Kirk Maldonado, can you weigh in on this one?

Oh, but of course I remember Narragansett Beer! Does the product still exist? To the uninitiated, let's just say that 'Gansett wasn't exactly the Chivas Regal of beer. Quint, I even remember that Narragansett Beer had a premium label called Haffenreffer.

I'd love to find and read your column, but that would require you to share your real name with us! Do you mean "cross testing" or "cross dressing"?

I can't really tell from the electronic filing version -- just a bunch of computer code gibberish. But, I just noticed that www.freeerisa.com displays the schedules alphabetically. If you search for a return and then select "Show all", you'll get everything in alphabetical order.

What happens when we attach a Form 5558 extension? Do we sort it under "F" for "form", or under "E" for "extension"? Does it go before or after Schedule E? And, what if we're really confused and are still filing a Schedule F? Here's my solution: I'm too confused, so I just won't prepare any more Form 5500's.

My colleagues in our Audit Department have restated the prior year and issued an unqualified opinion for the current year. I'm the one, however, who has the unenviable job of cleaning up Form 5500.

Sort of like this message thread?

wmyer -- Yes, the plan is audited, and the opinion is unqualified. I'm leaning to Archimage's advice. The changes are too substantial to plug as income/expense, so I guess I should amend last year's Schedule H and start this year with clean balances.

I'm working on Form 5500 for a new client. The previous accountant had made a mess of things, and the Beginning of Year balances on Schedule H are wrong...by some very material amounts. I know that I can't change the opening balances, and that my options are to: 1. Amend last year's return (don't want to do that), or 2. Make an adjustment to net assets on this year's return (sounds good). But, where do you plug the adjustment on this year's Schedule H? Good ol' Form 990 provides a very convenient Line 20 for making adjustments to net assets. There's no similar line on Schedule H. How do you plug the difference? Believe it or not, I've never encountered this situation until now.

Andy, I think NoName is wearing one of those always chic French berets, with a pair of goggles pulled up high. Perhaps he's a WWI aviator?

Blinky, it's obvious that you've never worked as a Tax Accountant. This is exactly the sort of issue that keeps us awake at 3:00 am. In fact, I'm now going to have to call DOL and get an answer, just to satisfy my curiosity and, of course, to annoy you.

Well, how about those voluminous, headache-inducing new regulations?

Happy anniversary, No Name, and that's great news about your mother's birthday. In the future, though, you might want to post this sort of message to the "Miscellany" forum. Certain people get very nasty when someone puts non-benefits-related content in a benefits forum. I'm not among those people -- no snide remarks here! -- but I've certainly had my feelings hurt on occasion.

No Name, I was there for an afternoon game on Thursday, 08/04/05. I saw the return of Matt Clement (after that horrifying line drive to his head) and Tek's first ever grand slam. What a great day that was.

WDIK and Stephen, you guys rule! Thank you for answering this one. Did you know that Brady also had 53 stolen bases in one season? That 50/50 achievement is one of the most exclusive clubs in MLB.

Thank you for your help.

I'm trying to find the answer to a trivia question. So far, I've come up short. There have been 3 players born in Maryland who hit 40 home runs in a season. Who are they? I've come up with: 1. Babe Ruth (well, duh) 2. Jimmy Foxx 3. ??? I don't know The answer isn't Al Kaline, Harold Baines, or Cal Ripken. Despite their brilliant careers, none of them ever hit 40 in one year.

Yes, the decedent named an executor of his estate. Can this individual sign and file Form 5500-EZ?

During the early 70's, Doug Griffin and John Kennedy covered the middle infield and switched off as shortstop and second baseman. I recall that they were both fairly solid defensive players. As for Edgar, be afraid...be very afraid.