Participant count question

[gle318612]

In a plan, when one unique individual is both a participant (in his/her own right) and a person receiving either pre-retirement survivor annuity payments (or eligible for such) or the survivor annuity from a joint and survivor annuity (e.g., the spouse of a deceased other participant), in terms of the participant counts (item 7.a, 7.b etc.) is that individual counted as one or two participants for 5500 participant count reporting purposes. The 5500 instuctions doesn't seem clear on this matter and I get different "opinions" from other sources. Thanks.

[Guest Sieve]

Don't know for sure, but I can't beleive you'd count an individual more than once. The 5500 asks for individuals, doesn't it, rather than accounts or accrued benefits? So one person just can't be 2 participants (in my view of the world, anyway)--perhaps entitled to 2 different benefits, but just one participant. I wouldn't be too concerned about it, frankly, unless counting as 2 would cause the plan to be subject to audit and counting as 1 would not--just be consistent in the approach from year to year.

[Kevin C]

Take another look at participant category 4 on page 17 of the instructions. It says: "Deceased individuals who had one or more beneficiaries who are receiving or are entitled to receive benefits under the plan."

[John Feldt ERPA CPC QPA]

Kevin has it.

If you have an employee participating in the plan who is also a beneficiary of a deceased participant (thus they have two benefits in the plan), then we have always counted that as 2 participants for the Form 5500.

If an employee dies and leaves their account to 5 beneficiaries, and the beneficiaries' separate benefits or accounts are all in the plan, then we have always counted that as 1 participant, not 5.

[Guest SuzieQNEC]

On the topic of counting beneficiaries, but new question of a different nature:

Does it matter if beneficiaries receiving benefits in a pension plan are counted separately on form 5500 (7e) or are instead included in the Retired count (7b)?

(To be specific, prior actuary and administrator for set of db plans did not separate out beneficiaries in valuation data, so 5500 counts have apparently always included the beneficiaries in the retiree count and left beneficiary count at 0.)

[John Feldt ERPA CPC QPA]

They should be reported on 7e.

Does it really matter? I don't think the DOL or IRS or PBGC will make a big stink if you report them the best you can based on the data you have after making attempts to get accurate information. If they are in pay status you certainly should be able to know because of how the 1099-R was coded (death).