Plan Characteristic Codes for Line 8a

[Guest LWilson]

We have a client who completes their own 5500 and then they ask us to review it.

Among the Plan Characteristic Codes they have chosen for line 8a is a Code "2R." I've never seen code 2R before. Is this a new code for 2001? What does it indicate?

[pmacduff]

Per the instructions, "2R" is the new code for a plan that has participant brokerage accounts. It is new on the 2001 form. Hope this helps.

[Guest LWilson]

Thanks.

I guess I'd better pick up a new reference book. I thought we'd be able to get away with continuing to use our 1999 reference book for another year.

(Hmmmm, I wonder where they came up with the idea that their accounts are brokeraged!)

[Fredman]

Not sure if the last comment was meant to be sarcastic, if not...

The term "brokerage accounts" is usually inter-changable with self-directed, segregated, sub accounts, etc.

If a participant has the option of buying a stock, bond, mutual fund or other investmetns that are not part of the plan's normal offering of investments then its deemed to have a brokerage account option and 2R should be used. Keep in mind 2R also allows gives you the option of "lumping" amounts on the other lines of Schedule H.

See this discussion for additional info:

http://benefitslink.com/boards/index.php?showtopic=14861

[Guest LWilson]

Thanks for the additional info source . . . I am quite sure this client's accounts are not brokeraged . . . core choices, period. Perhaps the person completing the form was confused by the "participant directed" wording.

[david rigby]

5500 forms and instructions

http://www.dol.gov/pwba/pubs/forms/formmain.htm