Distribution of Annuity Contract

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An ongoing defined contribution plan purchases and distributes an individual annuity contract in full settlement of the participant's benefit under the plan.

1. On the 5500, does the plan check off box 9(b)(1) (insurance as a plan benefit arrangement)? Proposed answer: No. The instructions say "Insurance" means "the Plan" has an account, policy, or contract with an insurance company..." Here the plan is not a party to the contract.

2. Is Schedule A required? Proposed answer: No? The contract is not a plan asset, and no participants are covered by the contract at year end. (The employee ceases to be a participant by virtue of the annuity purchase).

3. On Schedule H, is Line 2(e)(2) completed for the annuity purchase? Proposed answer: Yes.

4. On Schedule R, is Line 2 completed for the annuity purchase? Proposed answer: Yes, for the year the contract is purchased only.

Thanks for any assistance...

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(I hate 5500's...)

[WDIK]

1. Agree

2. Agree

3. Agree

4. Agree, but only in the year the contract was purchased (see instructions)