Final 5500 for merged plans

[Guest Laura A]

I'm working on final short year 5500 filings for several plans that were merged due to a corporate acquisition. What data should I use for Line 21 completion? All plans are calendar year. For mergers that took place right after year-end (i.e. in January), is is safe to use the 1997 5500 data? Or should this info be shown as zero since there are no longer participants in the plans? Or should I get employee counts for the short period from the employers?

[Dawn Hafner]

Did any participant benefit under the plan during this period? If not, you can mark the answer that no HCE benefits, and leave the rest of question 21 blank. This may be the case if for example the merger took place on January 1st, so that there were no contributions under the old plan for that year.

[Guest Laura A]

I found out that no one could make deferrals into the old plans once the mergers were announced, so no one would have benefited from a 401k standpoint after 12/31/97. That's a very good answer, since trying to get data for line 21 would have been rather painful! I appreciate your help-thanks!

[Guest derek]

Laura, just one point of caution. You may want to revisit question 21 and the definition of benefiting to see if additional vesting service credited due to the transaction (although not necessary in a merger) or other activities constitutes benefiting for item 21 purposes. I seem to remember that "benefiting" was more than just receiving contributions during a year. Also, you might ask Sharon I. at IRS how she thinks the question should be dealt with.

[This message has been edited by derek (edited 11-06-98).]

[This message has been edited by derek (edited 11-06-98).]