Client disclosure

[Gary]

Say a client has a 1-participant DB plan and at year-end plan assets are $50,000 and the client says he does not want to file the 5500EZ with the DOL since assets are less than $100,000.

In this situation do some of you prepare the Schedule B and Form 5500EZ to deliver to the client for their records or do you just prepare such forms for your internal records or do you take another approach?

One of the dilemmas is that we may prepare the forms and deliver them to the client and the client will say they do not want the forms nor do they want to pay for them, since they do not intend to file them with the DOL.

Thus we are looking for ways of handling this administrative situation.

Of course I realize that our communications on this situation need be addressed at the onset of our services. At least in the future.

Thanks.

[david rigby]

I would prefer that both my files and the sponsor's files include documentation of why the 5500 was not filed. Need not be a dummy form, but could be a letter. The fee for this may be built into the service, whether you file no form, the EZ, or the regular 5500.

If you were exempt from filing a 1040, wouldn't you want to write down the reason?

[Guest dsyrett]

As the plan's actuary, I generally prepare the Schedule B anyway since information on that form will be needed in the next year. I will usually forward the B as well.

In some cases, the sponsor will ultimately receive some discount for not having the 5500EZ and Sched P prepared. However the savings in effort is fairly small compared to the overall work still required for the year.

[Guest penman]

Isn't the Schedule P a good argument for making the filing even if the assets are less than 100K?

[Lame Duck]

Filing the Schedule P is the argument we make with our owner-only 401(k).