Trust Tax ID Number

[Guest mingblue]

It is my understanding that a pension plan sponsor should obtain a Trust Tax ID Number for say a brokerage account set up in the name of the plan - is this the same as the EIN number used on the sponsor's 5500 ? Form SS-4 seems to indicate that ??

[SoCalActuary]

The SS4 should indicate that the new entity is a Trust. The tax ID of the trust will be used to report any investment activity and payments made from the trust. This number is disclosed on the 5500 Schedule P.

The trust is a separate legal entity from the plan sponsor, and it needs a different tax ID from the party who is filing the SS4, presumably the plan sponsor.

[Guest mingblue]

The SS4 should indicate that the new entity is a Trust. The tax ID of the trust will be used to report any investment activity and payments made from the trust. This number is disclosed on the 5500 Schedule P.

The trust is a separate legal entity from the plan sponsor, and it needs a different tax ID from the party who is filing the SS4, presumably the plan sponsor.

great ! thanks SoCal

[Guest mingblue]

Does anyone know what the ramifications would be if an employer made contributions to a brokerage account that didn't have a Tax ID Number ????

[Dougsbpc]

Probably nothing. We have had a few plans over the years that did not get around to getting a trust Id number until the following year. You really must have a trust id # when a former participant gets paid benefits.

[Guest mingblue]

Probably nothing. We have had a few plans over the years that did not get around to getting a trust Id number until the following year. You really must have a trust id # when a former participant gets paid benefits.

So if I'm a plan sponsor that wants to set up a trusteed brokerage account in the name of the plan all I would need to do is call a brokerage firm, set up the account in the name of the plan with a deposit, & have the brokerage provide a trustee ? Is it that simple ???

[SoCalActuary]

Sorry, I don't think so. If you use the trustee services provided by the broker, you have to have a service

agreement with them. They don't do that for free.

[David MacLennan]

Probably nothing. We have had a few plans over the years that did not get around to getting a trust Id number until the following year. You really must have a trust id # when a former participant gets paid benefits.

I used to think you need a trust ID when a participant gets paid, for the 1099R & 1096, but Ann 84-40 blesses the use of the employer EIN for the tax forms connected with plan distributions. Certainly it makes more sense to have a separate trust ID, but consistency is probably a better guiding factor.

[mwyatt]

I wonder if anyone out there has run into this problem with TINs? Back in 1997 we were pretty diligent about obtaining these numbers for all of our clients. Of course many of our small plans have sporadic, if any, distributions over the years. We had one client last year where the IRS had "zapped" their TIN due to lack of usage, and we went through hoops for awhile since they had withholdings that were orphaned. Not sure why the IRS would cancel out numbers, think they're free the last time I checked.

BTW, much easier to obtain these numbers now as you can obtain them online. Just remember to eliminate punctuation and parantheses when entering the data.

Online application