EFAST - DB Plan 5500 Filing w/o Sch SB

[Guest Richard Feynman]

Suppose it is not possible to do the actuarial work and complete the 2009 Sch SB by Oct 15. Can you file just the 5500-SF w/o the Sch SB and avoid any filing penalty? Or will EFAST reject the filing w/o the Sch SB? It is anticipated the SB would be completed within a month after Oct 15 and filed at that time. Thanks in advance for any thoughts/insight on this.

[david rigby]

IMHO, EFAST2 has nothing to do with the likely response to your question.

You (the plan) face the same EBSA/IRS wrath now as you would in any prior year of filing without the B.

[GMK]

Any relation?

http://en.wikipedia.org/wiki/Richard_Feynman

[Guest Richard Feynman]

Not following - there was no wrath before, based on what I have heard from many folks. They (DOL/IRS) would send you a letter in a month or two and say "please file the Schedule __ (R, B, etc.) you forgot it". You filed it and that was the end of the matter. I thought I heard at some EFAST seminar that they consider incomplete filings to be the enough to prevent filing penalties, at least for now.

[Guest Richard Feynman]

Any relation?

http://en.wikipedia.org/wiki/Richard_Feynman

No, just a fan.

[Tom Poje]

on a webinar or tele conference or whatever the DOL had on e fast 2, the question arose about filing a large form without an accountants opinion.

the DOL said or hinted strongly or implied heavily you couldn't do that. no longer could you file w/o the opinion, then get a letter months from now saying you indicated there was an opinion, but no opinion was attached and then send it in as if it was ooops, I forgot to arttach it.

I would assume the same works for the SB. since the 5500 indicates its a DB plan, I would expect the EFAST 2 audit check to look for an attachment, and if there was none it would be rejected, unacceptable, etc.

if you were to attach a blank schedule, saying to yourself "I will amend later and send it in (implying the first filing was an error and I discovered it)" I wonder if the DOL / IRS will look at the initial filing, see a blank form and say "error my foot, how do you attach a blank schedule"

In other words, I'd be very careful about such practices. might get away with it the first year, but I have a feeling the DOL / IRS are trying to close thise type of loophole.

but then, I don't do DB, so what do I know.

[PensionPro]

The 5500 instructions state that "one or more ... administrative penalties may be assessed or imposed in the event of incomplete filings or filings received after the due date unless it is determined that your failure to file properly is for reasonable cause."

With the electronic filing requirement with its edit checks, it makes it difficult for practitioners to argue reasonable cause that the dog ate the homework or the Schedule SB or the accountant's opinion. The filer may be liable for the penalties for incomplete filings.

[Penman2006]

What if you have a DB plan that terminated 12/31/08 and then they made the distributions during 2009? A Schedule SB is not required after the plan year of termination. How do you file a 2009 5500 or 5500-SF for a DB plan with no Schedule SB attachment without EFAST rejecting the filing?

[Lou S.]

What if you have a DB plan that terminated 12/31/08 and then they made the distributions during 2009? A Schedule SB is not required after the plan year of termination. How do you file a 2009 5500 or 5500-SF for a DB plan with no Schedule SB attachment without EFAST rejecting the filing?

One of the questions on the SF is, "Is this a DB Plan subject to minimum funding" - if you answer yes they should be looking for an SB, if you answer no they should not be looking for one.

As for the 5500 I think if you just don't check that an SB is attached in Q10, they shouldn't be looking for one on their audit check.

As to to OP asking about sending in w/o Sch SB, that's one I haven't heard. I've heard of a lot of plans in the past that would file w/o an audit and use it as an unofficial extension to get the audit finished. My understanding is that you can still try that but due to the new error checks the letter asking for the missing audit is going to go out within days of filing now it instead of about 2 months after you filed like it did in the past.

[Penman2006]

That's how we handled it on the SF but technically it is a DB plan but it's not subject to minimum funding. In other words, if it matters, answering that question "no" could lead you to believe it's a DC plan. I'm a little loopy.

[Lou S.]

That's how we handled it on the SF but technically it is a DB plan but it's not subject to minimum funding. In other words, if it matters, answering that question "no" could lead you to believe it's a DC plan. I'm a little loopey.

The instructions say for DC plans to "leave that question blank" so I think it is clear it applies only to DB plans.

[My 2 cents]

If the defined benefit plan terminated effective 2008 and that termination ran to completion (never mind in 2009 - this would be true even if the distributions were completed in 2010), then the plan is not subject to minimum funding standards for the 2009 plan year and no Schedule SB would be required. While (as may be the case with any piece of knowledge) there is the possibility that what I know to be true isn't, let's just say that I know this to be true. A 2009 Schedule SB is only required for a plan that terminated effective in 2008 if the termination fails and/or is rescinded.