SSA Count

[Leopurrd]

Hi everyone,

I've been told two different ways on the SSA count for line 7i on the Form 5500:

1. Your # equals the total of A's and D's (or B's and C's as well but it's not common to report those here); or

2. Your # equals only the number of newly reported participants (aka the "a's").

Unfortunately I can't find anything definitive (in writing) to prove or disprove either way.

Does anyone know of a source where I can find this info?? What is the standard practice on the board here??

Thanks for your help!

Vicki

[WDIK]

Line 7i states, "If any participant(s) separated from service with a deferred vested benefit, enter the number of separated participants required to be reported on a Schedule SSA (Form 5500)."

I would only count the "A"s based on that phraseology.

[Bird]

Agree. We only report the number "required" as per the instructions. So sometimes we have a "0" but still file an SSA (with one or more "D"s).

[Leopurrd]

Thanks for the replies! I was able to find a copy of the 5500's preparer's manual (albeit from 2003) and it states that you should add everyone, whether they are an addition, deletion or correction? Seems that this is another foggy answer (when isn't it?)

I know that you both report only A's, and as Bird pointed out, you sometimes have a 0 count for your SSA when only D's are reported. Have you ever received any IRS correspondence on this?

Vicki

[Bird]

you sometimes have a 0 count for your SSA when only D's are reported. Have you ever received any IRS correspondence on this?

No.

You do get the Relius stern Uncle Sam face though. :angry:

[Tom Poje]

we have always include A's and D's.

I guess it depends on how you read things.

In other words, we follwo the 5500 preparers manual.

Did someone who receive a payout separate from service? Yes

is a D required to be reported on SSA? Yes.

Line 7i states, "If any participant(s) separated from service with a deferred vested benefit, enter the number of separated participants required to be reported on a Schedule SSA (Form 5500)."

The only ones who we wouldn't include would be those who separated woth a deferred benefit and are not required to be reported - either they were paid out in the year of termination, or they were paid out in the following year and they were never reported previously.

[Bird]

is a D required to be reported on SSA? Yes.

I don't think so. A literal reading, I think, says you must report participants entitled to deferred vested benefits, and may use the SSA to revise prior information.

FWIW

[Tom Poje]

the instructions for 2005 says

"Use Schedule SSA to report revisions to pension information..." (what other revisions are possible? I guess maybe a name change)

"...you do not need to report changes in the value of the employees accounts, since that is likely to change. However you MAY report these changes if you like."

I would take that to mean simply a change in balance, but not include one that has gone to zero, especially with the qualifier that the account is likely to change.

Note: the old instructions said "You MAY Use Schedule SSA to report revisions to pension info...."

and "You are encouraged to report changes....other than account balance changes..."

so this is a change (even if so slight). But the word MAY has been dropped.

[Bird]

OK, I have to admit I grabbed an old set of instructions.

But still, the only place it says a participant must be reported is where it describes a terminated participant with deferred vested benefits.

If I didn't report a participant under Code D I'd sure argue that I didn't have to.

FWIW - not much.

[Leopurrd]

Wow. Who knew such an innocent question would become a hot topic?

Thanks again for all the posts. I'm more for the A and D, just so I don't get Uncle Sam in Relius. But I do agree that the instructions to the 5500 are very ambiguous on the reporting. I first went there to figure out what to report and came back without a straight answer....

Probably a good ? for the IRS Q&A this year!

BTW, anyone else realize how the smilies can become addicting???

[Guest HiKidsImASrPensionAdmin]

I would make sure to report a participant with a D. The Schedule SSA is forwarded to the Social Security Administration who keeps track of everyone with a deferred vested benefit (big brother is watching u!). Then 25 years later when that person goes to collect their social security (assuming it will still be around in 25 years) the SSA is going to tell that person check with your former employer, they reported in 2005 that you had a deferred vested account balance.

So in the year 2030 the administrator is going to be looking through records trying to confirm that this participant was truly paid out.

Just a minor tid bit of info I remember from an ASPPA web seminar.

[Guest SWH]

Trust me... report your D's b/c the participants do come calling! I've had it happen!! You can tell them that they got paid out and they will tell you that this piece of paper says that they are still due money and then you are digging through old files and cussing prior admin's for not reporting D's and ......

let's just say you can save yourself a lot of hassle if you report the D's!!!!

[Marcus R Piquet]

I know this topic is old, but the following quote from the 2006 version of the 5500 Preparer's Manual from Janice Wegesin, §6.03 may be of use:

“It is recommended that the number reported at line 7i match the number of individuals reported on Schedule SSA, whether the individuals are additions, corrections, or deletions to the record; however, it should be noted that there is no EFAST edit check comparing the information reported here to the total number of individuals reported on Schedule SSA.”

The 5500 software publishers have been told to count D's. Wegesin says it is recommended to count D's. That's good enough for me.

[Lori Friedman]

Without getting into the merits of one author vs. another author, The 5500 Filing Guide by Stephen W. Forbes says that, "The number on line 7i should match the number of participants the preparer is reporting on the Schedule SSA with a code A".

This is the only answer that really makes sense. The entry code A people are the individuals who "separated from service with a deferred vested benefit...required to be reported on a Schedule SSA", as stipulated by Form 5500, Line 7i.

[pmacduff]

Ahhh semantics...gotta love it! ..."required" to be reported...I see the argument that "D"s are not required to be reported, but FWIW we count them all as Tom's office does and have had no problems. We like our Relius smiley face to come up as well.....

[Tom Poje]

I guess I need to get new instructions. the ones that come with my 5500 (and are similar going back to 2005)

the opening line for the ssa says

General Instructions (of whom to report) for the SSA

(at this point there are 3 bullet points, the third one being):

previously were reported under this plan but are no longer entitled to those vested benefits.

to me, that implies they are required to be reported.

were those people separated from services? certainly,

thus the line on the 5500 that says

participants who seperated from service with a defrred benefit...blah blah blah required to be reported - it only makes sense to include these people.

I know, logic and IRS don't go hand in hand, but...

[pmacduff]

Tom - now rereading the '07 instructions for Schedule SSA, I agree with you on the wording (as I mentioned, we do that anyway, but it's nice to have support !)

I think I was remembering WAAAYYY back when I was first trained...a time when the most important thing was to get those due a benefit reported; less emphasis on reporting those who had been paid out their benefit. I seem to recall that back then the instructions did appear more optional for the other types being reported; but alas...I could be mistaken!

[Tom Poje]

ah lady mcDuff-

I think part of the problem is the instructions speak of "When you must first report a termianted vested participant" but aside from the opening coment, there is no special instruction pertaining to ees no longer required to be reported.

Of course, the software we use is a real pain because it doesn't include the D people on the count. In another place it will list the people properly as D, but then it also includes (for some reason) type of Annuity, etc, so if you do the download into govt forms you have to do a bunch of editing - a real pain with a large plan. I think the first two letters of their name comes from the last two letters of 'torture'.

[Guest TooMuchFreeTime]

I've been going back and forth with some cilents on this issue as well (as we do every year).

Here's a quick rundown of the various authorities:

5500 Instructions: Zero help, saying only "If a number is entered on line 7i, you must file Schedule SSA (Form 5500) as an attachment to the Form 5500." Golly, thanks. Says nothing about what that number should be, however. Verdict: none.

Form 5500: "if any participant(s) separated from service with a deferred vested benefit, enter the number of separated participants requird to be reported on a Schedule SSA (Form 5500)." If D's aren't technically required to be reported, I suppose you could argue they're not included here, but my reading is that if they're on the SSA, they're on the line 7i. Verdict: Open to interpretation.

Relius: I've heard others say they've received validation errors for different values, but in working with the 2008 (2007 plan year) version, I've yet to come up with a value that will generate a validation error. Verdict: none.

5500 Preparer's Manual: Seems to say that D's aren't required to be counted here, but that it's "good practice" to include them here anyway. Verdict: Split.

In total, we've got two "No Comment"s, one "maybe" and a "depends." I think this is a fair assessment of where the issue stands.

Personally, I include the D's unless there's pushback from the client (there is from some). In that case I tell them why I think they should be included, and if they still want to exclude the D's, I do it their way. It's their form, after all.

Ultimately, however, isn't the issue really about compliance? Any government reviewer should be able to look at line 7i and the SSA side-by-side and know conclusively whether they're being included. Has anybody taken either approach ever been challenged on their count? I'm starting to think there's no wrong answer on this one.

[Lori Friedman]

This thread began with such a simple, straightforward question, but it's generated an ongoing discussion with no consensus of a resolution.

There's a fundamental problem with the Form 5500 instructions -- the IRS continues to prepare the instructions for a Dept. of Labor form. The instructions are often unclear or fall short of conveying the Dept. of Labor's position.

[Guest Robin.Wolf]

I am reluctant to resurrect this topic, but I am running into the same question this year and the instructions to the 5500 and Schedule SSA are just as vague as before.

Clearly it is important to report your Code D participants on the SSA and I have always done that, mandated or not. But, if I have 4 Code As and 6 Code Ds and I am putting all 10 of them on the SSA, what number do I put in line 7i of the 5500? 4 or 10?

I doubt that this would ever be a big issue upon audit, but it is bothering me that the answer is not more clear-cut.