Form 5500: Deferred Vested Benefit

[Guest wwest]

What is the purpose of Q 7(i) on the Form 5500 and the Form SSA reporting? If a DC plan immediately vests participants, how is this related to a deferred vested benefit?

[Ervin Barham]

The main purpose is to give pension administrators something else to do...

However, this is also used for people who postpone distributions, or in the case of some old profit sharing plans or defined benefit plans that would not let you have any money until age 65, so that the Social Security Administration will notify a participant that a benefit is due.

If there's any other purpose, I am not aware of it.

In today's 401(k) market, rarely does anyone postpone distributions or the plan allows for immediate payouts, so it becomes less of an issue.