Correcting last year's mistake

[Guest Jensen]

On the 2004 Form 5500, Schedule I, the total expenses were not deducted from the total plan assets, thus it appears to have about $3,000 more in end of year assets than I think it should. As a result, I'm in a quandry over what to do for my 2005 beginning balance. Two questions:

(1) Am I correct that the total expenses (which equals the amount of benefits paid during 2004) should have been deducted to arrive at the end of year total plan assets? Is there any reason why this amount would not/should not have been deducted?

(2) How do I correct it? Should I use the correct balance for my 2005 "beginning of year total plan assets" and also prepare an amended/corrected 2004 Form 5500? If I prepare the amended/corrected 5500, do I need to provide any type of explanation for why I am doing that? Do I send the corrected 2004 Form, the explanation and the 2005 form in together?

Thanks!

[JanetM]

Your 2005 beginning balance has to match your 2004 ending balance. First, double check the assets at 12/31/04 to make sure you have a problem. File an amended 2004 5500, no explanation necessary. File your 5500 for 2005 .

Yes, you expenses should be deducted from your assets to get to ending balance. Find a statement from the custodian of the assets to verify the amounts.

[Guest Pensions in Paradise]

Jensen - I don't mean to sound harsh, but all of the questions you posted today are things you should be asking your boss. You need to ask your employer to provide you with proper training.

[Guest Ira Hayes]

Ladies and Gentlemen, situations like this are precisely why timely peer reviews are necessary.