When to file final 5500 if all Participants have been paid but employe

[Guest Powers]

I have a calendar year Defined Benefit Plan which has terminated. All of the participant’s benefits were paid to them on December 21st, 2000. There is still however assets left in the trust which represent a mistake of fact contribution. These monies were returned to the employer this month.

I feel that I still have to file a 2001 short plan year return, as there were still assets in the plan although all participants were paid. But this Mistake of Fact over contribution is throwing me off. I could not find any definitive sources relating to a case such as this. Anyone have any thoughts/sources?

Thank You.

[Spencer]

I've never had that situation, but I think your instincts are correct. I would file a 5500 until the assets reach zero, but I can't give you a site or find any guidance on this either.

anyone else out there have an experience like this?

[actuarysmith]

I am not sure I have an exact site to give you, but it has always been my understanding that you continue to file 5500's until the ending balance on the last filed return is $0. (I don't think that the source of the contribution is relevant - whether it is mistaken or not).

Even if it turns out that it is not strictly necessary, I am sure that if you Don't file a final return with a $0 ending balance, you will have to answer an IRS inquiry.

[david rigby]

I agree with the above responses. The ending balance on a final return should be zero. I suspect that the situation posed in the original question is more common than we think.

[RCK]

I agree too that the ending balance on the last 5500 must be zero. I'm a little concerned that the amount returned to the employer is really a reversion of residual assets, and not a refund of a mistake of fact contribution.

[david rigby]

Yeah, I had the same thought. Probably would be advisable for the sponsor to make sure documentation is complete, and even to get auditor to review.