5500 filing with Schedule B not required; how to avoid rejected filing

[AndyH]

Note: This question was also posted in the DB section.

A DB plan terminates effective 12/31/2000 but does not distribute all assets until 3/2002.

Because the plan terminated in 2000, Schedule B is not required for 2001 or 2002 5500 filings, but it was required for 2000.

Will EFAST automatically issue a rejection notice if Schedule B is omitted? How does the system know whether it was correctly or incorrectly omitted?

The only questions about termination appear to be (1) whether the plan teminated in the current or prior year and if so what was the amount of the reversion; (2) and whether at the end of the year the plan still exists for PBGC purposes.

Am I missing something or is a rejection notice automatic in the year after a DB plan terminates?

[Guest KAR]

Andy - I have submitted a number of finals without Schedule B in the year of distribution. There have been no rejections at this point, so there must be a check and balance with the termination question. Good luck with your filing.

Kim

[david rigby]

Ideally, the final Schedule B will have "Final" added somewhere easily seen.

However, in the 2001 instructions to the Schedule B, http://www.irs.gov/pub/irs-pdf/i5500sb.pdf, under "Who Must File" is the following footnoote:

"For terminating plans, Rev. Rul. 79-237, 1979-2 C.B. 190, provides that minimum funding standards apply until the end of the plan year that includes the termination date. Accordingly, the Schedule B is not required to be filed for any later plan year. However, if a termination fails to occur - whether because assets remain in the plan's related trust (see Rev. Rul. 89-87, 1989-2 C.B. 81) or for any other reason (e.g., the PBGC issues a notice of noncompliance pursuant to 29 CFR section 4041.31 for a standard termination) - there is no termination date, and therefore, minimum funding standards continue to apply and a Schedule B continues to be required."

[AndyH]

Pax, I understand your point, but this is problematic for a few reasons (1) the point you raised, which sometimes results in revoked terminations, (2) the EFAST system's limits on what you can attach or write on the form, and (3) the system's ability to store and recall this for future reference (would a "Final" note on a 2000 Schedule B attachment be recalled in the processing of a 2002 5500 filing?).

I have in the past has such rejection notices, and hoped that this system "bug" would have been fixed.

Kim, there is a chance that a 2002 final filing would be accepted without a Schedule B but there is nothing to allow the system to recognize a correct 2001 filing without a Schedule B.

Thanks for the comments.

[Lynn Campbell]

In similar situations, I have footnoted the 5500 form to indicate that the Plan terminated in a prior year and therefore no Schedule B is required...

[Blinky the 3-eyed Fish]

I have included an attachment noting that the Schedule B is not required because the plan terminated in a prior year, but have still received DOL error letters. So, each time I have had to write responses, but they have never come back a second time, so at least the responses register.