1ST YEAR 5500

[Guest Mike Schwing]

Do you have to file a 5500 for a first year plan which ended up making no contributions what-so-ever because they set up the plan late in the plan year?

[Guest b2kates]

Is the plan active?

Is it a profit sharing plan?

If not, then contributions are required.

5500 is on basis of plan year. I suggest filing is still required.

[RCK]

The instructions to the 5500 say:

All pension benefit plans covered by ERISA are required to file a Form 5500 except as provided in this Who Must File section. The return/report is due whether or not the plan is qualified and even if benefits no longer accrue, contributions were not made this plan year, or contributions are no longer made. Pension benefit plans required to file include both defined benefit plans and defined contribution plans.

Sounds like a "yes" to me

RCK

[JanetM]

This is a new plan with zero contributions for the first year? Or the contribution is not made until the following year?

If there is a contribution attributable to the first plan year then you will file the 5500 showing the only asset as contribution receivable. If there is no contribution for the first year of the plan why did you make the plan effective during that year? Would have been better served to make the plan effective the first day of the year you intend to make contributions.

[mwyatt]

This situation isn't out of the realm of possibility, as we had it happen a few times (obviously all profit sharing plans). Consider:

PS Plan established in Year X to receive contemplated distributions from a terminating DB plan; however, distributions don't occur until Year X+1;

PS Plan established early in Year X; subsequent to establishment, business conditions deteriorate to extent that no contribution is made for Year X;

PS/401k Plan established in Year X; due to confusion in sorting out where investments are to be made and fouled up employee communications on deferrals, no deferrals are actually made in Year X.

Since you legally established plan for Year X, you are required (unless you fall under 5500-EZ exception for under $100k) to file the Form 5500. Obviously this should be a pretty simple form to complete (enter a bunch of zeros in Schedule I and Schedule T clearly should take less than 30 seconds).