Completing Form SSA for a Plan Merger

[RCK]

We have a difference of opinion in our office on the following:

Participants have been reported on a Form SSA in the past as an Add because they terminated and did not take a distribution. They are still in that status when the plan is merged into another plan (and the other plan is the survivor).

In the final 5500s, do you report them as a D on the merging plan and an A for the successor plan so that you are sure that the Social Security Administration tracks that right and (assuming they do not take a distribution).

OR do you do nothing special for them in the merger relying on the Social Security Administration to pick up the merger/transfer data from the final Schedule H?

Any thoughts?

[Kimberly S]

Does the Schedule H even go to the SSA?

[WDIK]

relying on the Social Security Administration

[pmacduff]

assuming same sponsor, different plans??

IMHO I think the "most correct" way would be to report on the "old" plan as "D" and the new plan as "A" as you suggest. My logic is that even if the Sponsor remains the same, the Social Security Administration is going to tell the participant (when they apply for benefits) that they MAY have a benefit in "such & such" a Plan.

[JanetM]

We have done a few mergers here (we are plan sponsor not TPA) we have filed final return for merged plan and shown all on SSA with D. Then the return for the new combined plan shows all with an A.

Has worked so far, no one has received two letters.

[RCK]

Thanks for all the comments.

Interestingly, I just got a SSA inquiry from a spouse. Participant termed in 1994 from Company A, and was reported on SSA for the ESOP plan as an Add. He was paid out in 1999. He was not reported as a D at any point.

Later in 1999 we (Company B) acquired A, wound down the plan, paid out everyone we could find, and moved the few lost participants into an ongoing 401(k) plan. We did the final 5500, reporting it under the Company A plan name and EIN, but listing Company B as the sponsor.

And the spouse gets the SSA notice with the Company A ESOP as the plan and Company B as the sponsor.

So to Kim Sheek's question: I'm not sure that Social Security gets the Schedule H information, but they are able to pick up subsequent changes.

[PAL]

I would report as a D under the old plan and as a C under the new plan. The C code is for:

Code C —

Use this code for a participant previously reported under another plan number who will now be receiving his/her future benefit from the plan reported on this schedule. Also complete boxes (b), ©, (i), and (j).

PAL

[RCK]

Thanks to everyone for their thoughts.

We are taking the "D for the old Plan and C for the new Plan" approach.