Do I need to file?

[pixmax]

We have a client that started a new Plan as of 1/1/08, they have a new Plan Sponsor, EIN and Plan name. The Document states that all money was to be transferred from their existing Plan. The old existing Plan under a different EIN should have terminated and transferred the assets over to the new Plan. This never happened. Can I file a form 5500 for the new Plan with $0 assets? Any other suggestions? Assets will be transferred this year.

[BG5150]

Amend the new plan to have an initial effective date of 1/1/09?

[pixmax]

Amend the new plan to have an initial effective date of 1/1/09?

Good idea, thanks.

[WDIK]

How do you go about amending the original effective date of an executed plan document?

There is no problem filing a Form 5500 that shows zero assets.

[masteff]

Other concern... so the new plan doesn't have any benefits accruing in it? Or did 2008 benefits go into the old plan when they should have gone into the new plan per the new plan's document? What does the old plan's document say about when benefits cease accruing under it?

And my opinion is the Service will be looking for a 5500 on the new EIN so if you amend then you need to be sure to somehow update w/ the Service so they don't ding you as non-filing.

[Guest Sieve]

How would the Service know to be on the lookout for a 2008 Form 5500 for a new plan effective 1/1/2008?

[Bird]

I've heard it suggested that a plan doesn't really exist until it is funded, at least a PS plan. Although I'm sure someone could shoot a hole in that theory, it kinda makes sense and we've taken that approach the one or two times it's happened to us with no consequence...of course there is no consequence because the only way it could come up is if someone audits a later return and compares the effective date on the return to the effective date on the document, and that's not likely. Of course you want to use an effective* date of 2009 for the first return, not 2008.

*I guess that would be an "effective" effective date.

[masteff]

How would the Service know to be on the lookout for a 2008 Form 5500 for a new plan effective 1/1/2008?

The plan has a new EIN (see first post). I'm not saying it's certain they'd come looking for a non-filer but the plan is now in their system.

[Guest Sieve]

One of the basic requirements for plan establishment used to be that there must be some corpus in the trust before year-end. My undertstanding is that the IRS now takes the position that it will consider a plan in place for the year even if there is no actual trust corpus (as long as the trust is otherwise valid under state law for that year). And, of course, the Plan most probably still will have participants (both by its terms and as the DOL would see it), even without a corpus during the year.

That being said, I think lack of a corpus probably allows you to cut it either way. But, if you do intend eventually to fund the plan/trust, I personally would opt for the WDIK approach (file the Form 5500 with zeroes in the financial schedules). That way, there's potentially less "splaining" to do down the road.

[pixmax]

One of the basic requirements for plan establishment used to be that there must be some corpus in the trust before year-end. My undertstanding is that the IRS now takes the position that it will consider a plan in place for the year even if there is no actual trust corpus (as long as the trust is otherwise valid under state law for that year). And, of course, the Plan most probably still will have participants (both by its terms and as the DOL would see it), even without a corpus during the year.

That being said, I think lack of a corpus probably allows you to cut it either way. But, if you do intend eventually to fund the plan/trust, I personally would opt for the WDIK approach (file the Form 5500 with zeroes in the financial schedules). That way, there's potentially less "splaining" to do down the road.

The client funded the Plan for 2008 however it went into the other Plan's Assets. I thought about filing a 5500 for 2008 showing this as the receivable, since it was actually deposited in 2009. They also had deferrals deposited into the old Plan. I think I need to find out what EIN took the deduction before filing either of the 5500's.