DMcGovern

Everything I have read on this, including legal reviews/opinions state that the disclosures have to go to employees that are eligible, but have not chosen to participate. I like your interpretation of it, but not sure it would hold up under audit.

Have you seen the DOL's sample fee disclosure form for a 401(k) plan? It's eleven pages long! You can check it out at www.dol.gov/ebsa/pdf/401kfefm.pdf. Even if a plan sponsor goes through all the steps to obtain all the information, put it in this form and properly provide it to all the right employees, I seriously doubt if the employees will read it. I'm all for disclosure and keeping clients/participants educated about their retirement plan(s), but this is so cumbersome. As a TPA, we don't have access to all of the information that the plan sponsor is supposed to be providing to allow us to prepare the notices for them. How many plan sponsors (small companies) do you think really are aware - and take it seriously - that they are responsible for the annual/quarterly disclosures? And how many want to take the time out of their already busy schedules to go through all of this? It's such an administrative burden for these small business owners who were looking for a basic "plug and play" kind of arrangement.

I wasn't sure which forum to put this in; my apologies if I should have posted this some place else. Anyway, thanks in advance for your input on this! I am studying for the ASPPA DB course and am considering also signing up for the DB webcourse. Interested in hearing what others who have used the webcourse think about it?

AJ, I read that section in the EOB and have to agree with you. Great catch! I also checked with an attorney about it and he also agrees - no excise taxes for MPP's, just use EPCRS to correct the operational failure.

The IRS website specifically states that an excise tax applies if the required minimum funding is not met. In addition, the Section 4971 tax applies to all plans that are subject to Section 412, which includes money purchase plans.

I was glad to see Brian Graff's statement in response to the Gang of Six Plan for deficit reduction. Wish we had a way of backing him up! Would love to hear other's comments. http://www.asppanews.org/2011/07/21/gang-o...-on-fuzzy-math/

The IRS LRMs that I'm familar with relate to DC cross-tested plans, but maybe the thought process behind them would follow for DB plans. The naming issue relates to the ABT for coverage and specifically the "Reasonable classification test", which requires that the classification be reasonable and established under objective business criteria. The IRS has taken the position that naming a person specifically in a class is not a reasonable classification. A work-around for DC plans is to always pass coverage using the ratio test. Maybe your attorneys, frizzy, have already taken this into consideration?

the plan would have to have a QDIA and follow all of those rules (notices, etc)

only if it also qualifies as an EACA

I didn't hear anything about S-Corps, but partners in a partnership cannot have individual SEP plans now

I asked a similar question under the Form 5500 forum. 412(e)(3) plans are supposed to have limited reporting requirements on the form, but there doesn't seem to be any way of indicating this plan type on the form.

Ahh....now it makes sense. Thank you so much!

studying for the ASPPA DB exam and am not sure what this means & when it may occur: the book is referring to reasons that an employee is considered as benefiting for coverage purposes if a premium in not paid for specific reasons. One of the reasons given is: "The benefit previously accrued by the employee is greater than the benefit that would be determined under the plan if the benefit previously accrued were disregarded." Your help is appreciated!

I'm not familiar with a lot of the rules for SEP plans, so I'm hoping a SEP person can help me out. Is it possible under a prototype or individually designed SEP to exclude one or more of the HCE's from the plan? Thanks for your help!

Thanks for your response. There are times when the Employer distributes out to the participants in a month or months following when the investment accounts have been zeroed out.

For some plan terminations we do, the investment company does not do the distributions directly to participants. Instead, the investment company will process any rollover distributions, but for anyone requesting a lump sum distribution, the investment company closes the accounts and sends all the funds to the Employer. The Employer then has to issue the distribution checks (and take care of the withholding). If the Employer is just depositing these funds into a company account (not in the name of the plan), and then issuing all the checks from there, would the "clock" for the due date of the 5500 be the date the last of the funds left the investment company, or the date the last check was issued from the Employer? (We know it would be best for the Employer to deposit the funds into an account in the name of the plan, but the majority of them don't want to hassle with this since it's a one-time deal.)

Just heard from an informal source that the IRS will be releasing additional guidance shortly that will modify the due date for the 2009 and 2010 Form 8955-SSA. The modified due date will be the later of January 17, 2012 or the due date that generally applies for filing the Form 8955-SSA for 2010. No Form 5558 extensions will be allowed for the 1/17/12 due date.

But when you read the instructions for 6a & b, only 6b mentions "and who are reported in Part III of this form." In the case where I have 1 participant to report who was previously reported on Form SSA and was paid out in 2009, so needs to be reported as a "D" in 2009. In this case, I put "0" for 6a and "1" for 6b. To clarify: 1) So if you are only reporting for the 2009 plan year, you would report anyone that terminated in 2008 with a deferred vested benefit in 6a. Anyone with codes B, C or D would be reported in 6b. 2) If you are combining the information for 2009 and 2010, the instructions say to enter the total combined number in 6b. (i.e. 6a is not used at all for combined reporting) 3) If you are only reporting for the 2010 plan year, do you assume that the 2008 and 2009 dates in the instructions for lines 6a & 6b advance to the appropriate years (2009 & 2010) and report in the same manner as in #1 above; or, do you report all in 6b since that is where they would be reported in a combined plan reporting?

I have a similar question in another post. What is the purpose of section 6 in the form? Are they only asking for a count on the new terminated participants with a deferred vested benefit, or is it a count of the total number of people being reported on the form? It seems odd to put zeroes in there and then have people you are reporting on the second page. Back in 2008 on the Form 5500, question 7(i) seemed to be more of a "trigger" to indicate that Form SSA was required, so I counted all of the codes being reported.

Yes, and just think how long it took them to re-write those instructions! Let's see......49 minutes times the number of clients you have to complete - whew, I'm already tired! And, I think the IRS is trying to help out the financially instable US Postal service since we have to mail them to the clients due to the bar codes. Then, either the client mails them to the IRS (hopefully by the deadline), or you have them return it to you in the mail and you in turn mail it to the IRS.

I see on the first page of the instructions that you may use a "separate 2009 Form 8955-SSA to report information for the 2010 plan year or combine the information....". So, I put the 2010 calendar year dates in Part I and used 6a for the count being reported. Another stupid question, for the counts in 6a or 6b - you only include participants that would fall into Code A? The instructions for 6a and 6b only discuss participants entitled to a deferred vested benefit who separated from service either the prior plan year (6a) or the current plan year (6b). That would not include previously reported participants under this plan, or another plan sponsor's plan, or those you are deleting with code D? Just want to make sure if they see a zero in section #6, there won't be a problem if the filing only reports participants with codes B, C, or D.

If you are only reporting participants for the 2010 full calendar year, are you able to use the 2009 form? (I know I could put the 2010 dates in Part I) If yes, do you enter the # of participants reported on line 6a or 6b?

Perhaps, but in our 5500 software you don't even answer that question for 412(e)(3) plans

The Form 5500 EZ for 2009 and 2010 do not appear to have any way of indicating that the plan is a 412(e)(3). How would they know that the plan is exempt from providing the financial information, etc? I can see if you filed a form in 2008 or earlier, that would have been indicated on the form. But a new plan as of 2009 and forward has no way to notify them. Just want to avoid a letter from the IRS about it. Thanks

In working with the Plan Administrator, they initially decided that the funds would not be segregated out. It was anticipated at the time that the AP would be sending in the distribution paperwork ASAP. Even with the additional time involved, they are still reluctant to go through the paperwork and process to transfer funds to a separate account for the AP. Based on the information provided in all of the replies in this posting (and thank you all so much for the help!), I have alerted the Plan Administrator to some possible ramifications and the value of a separate account for the AP and for the participant. I do agree with everyone - segregate it out right away and avoid these types of headaches and possible legal issues!