5500 EZ: To file or not to file

[Guest jmrodrig]

Everyone,

We have a new client who has 2 plans. A DB and a DC. The owner is the only participant in each plan.

Assets in the DB plan at year end 2009 total 135,000. Assets in the DC plan at year end 2009 are 180,000.

The 2008 5500 EZ instructions read as follows:

You do not have to file Form 5500-EZ (or Form 5500) for a plan year (other than the final plan year) that began on or after January 1, 2007, if you meet the five conditions above and you have one or more one-participant plans that separately or together had total assets of $250,000 or less at the end of that plan year.

The Client meets the 5 conditions alluded to in the instructions. Pretend the instructions hold for 2009 as well.

Since the instructions say "OR" as in seperatley OR together. I am interpreting it as if individually the clients plans have less than 250,000 each no 5500 EZ. OR if together total assets are less than 250,000, no EZ.

Basically this client does not pass the "together" test but passes the "seperately" test. Should the client file the form 5500 EZ for the 2009 plan year?

Also, please note that we would just file the form to be safe but an advisor already told the client they would not need to file forms 5500 EZ and we prefer not to eat crow.

Thanks so much.

[Andy the Actuary]

File the 5500-EZ

From 2008 instructions:

Example for plan years beginning on or after January 1, 2007. If a plan meets all the requirements for filing the Form 5500-EZ and its total assets (either alone or in combination with one or more one-participant plans maintained by the employer) exceeded $250,000 at the end of the 2008 plan year, a Form 5500-EZ must be filed for each of the employer's one-participant plans, including those with less than $250,000 in assets, for the 2008 plan year.

This wording is clearer and not as awkward as the wording you cited.

In short, no crow tonight, except for other advisor.