Form 5500 for a plan with no assets

[Guest sdolce]

An S-Corp has two employees,both of whom are owners. The corporation establishes a PS plan for calendar year 2000,then decides not to make a contribution.They now have a plan with two participants and zero assets. I can't find anything that exempts them from filing a 5500 for 2000,but it doesn't make sense to report on a plan that has no assets. If they were partners instead of owners they would not have to file a 5500EZ until they had $100,000 in assets.Has anyone run into this situation before?

[Guest MTransue]

I've encountered plans that just didn't get themselves organized to start making contributions (employer or employee), and we've filed a $0 Form 5500.

The first year of the plan would be indicated as the first filing for the plan by checking the box (and short plan year, if applicable). Plus, the Form 5500 states the effective date of the plan as well.

If you didn't file a 2000 Form 5500, and filed next year (2001), the discrepancies may alert the DOL that the dates don't make sense (as mentioned above).

At least this was our reasoning for filing a Form 5500 with $0. Better safe than sorry was our theory.

[Kristina]

I agree with MTransue.

If you do not file, you will receive a letter for the year that you do file because of the effective date of the plan.

It might have been better to have amended the effective date of the plan when it looked like the company would not fund.

[Guest MTransue]

Since the assets equal $0, and the contributions are discretionary in nature (not subject to Sec. 412), the filing for 2000 is very simple. (I've done about a half dozen $0 filings for 2000.)

In my opinion, depending on the nature of the document, it's easier to file a $0 Form 5500 then draft an amendment, forward for execution, obtain a signed copy for your files, make sure an SMM is distributed, etc, etc...