5500 termination?

[Guest Moira]

Plan sponsor filed in 2001 and noted on Schedule I Part II question 5(a) that yes, a resolution to terminate the plan had been adopted. I see no record of a "final" form 5500 being filed ever (the 2001 version was not marked as the "final" report). In 7/2005, the employer started a new plan and transferred the assets of the old plan into this one. Balances from the old plan appear to have been rolled over into this one in September. (We are new recordkeeper/outsourced for the trustee as of 1/1/06, but I'm responsible for the 2005 Form 5500.) Need I be worried that there should have been an "old" plan final Form 5500? The "old" plan is filed under plan #002, but this "new" plan is 001. That looks odd to me. Any thoughts? Thanks.

[Leopurrd]

Hi Moira,

Just because the plan signed a resolution to terminate does not necessarily mean a final 5500 was filed. In fact, they probably are just now getting ready to file a final for the previous plan, because only now have all the assets been distributed.

The prior employer needs to worry about the qualification of the plan, specifically if it was restated/amended as required, since you only have 12 months to distribute the assets after signing the resolution. Otherwise the plan would be required to stay in compliance until all assets have been distributed.

There may be additional implications that I'm not aware of, but I'm sure one of the other posters here can explain those. As for your liability, I'm sure you would need to know if the rollovers were from a qualified plan or not. I can't imagine a plan losing it's qualification for distributing assets later than needed, assuming that the plan was timely restated and amended as required....then again, they do some kooky things at the IRS offices nowadays.

HTH,

Vicki

[Guest Moira]

Thanks so much, Vicki.

Moira

[Nate X]

"In 7/2005, the employer started a new plan and transferred the assets of the old plan into this one."

I agree with Vicki that the employer was required to adopt all required law changes through that date. The Employer was also required to file 5500's through 7/31/2005.

In addition, successor rules would apply to the new plan.