8955 SSA Question

[PFranckowiak]

Ok - did I read correctly on the Draft that while we are STILL in Draft format - the 2009 return is Due 3/31/11????

How can it be due if they have not got around to issuing the form yet.

Also if you have a participant that should have been listed as an A on a 2009 form, but has since been paid (would have been a D on the 2010 form) Can you just leave them off of both forms. I could not find anyting in the instructions - of course by the time I read all the stuff that didn't apply - like Missing Children - I am sure that I missed some stuff.

Thanks

Pat

[ESOP Guy]

You have the date wrong. It is 8/1/2011. But yes they set the due date while the form is still a draft.

http://www.ebia.com/WeeklyArchives/Statutes/20487

[PFranckowiak]

Except where you have the final 5500 in 2009 - it said the date didn't change under exception.

What about who we have to report?

Pat

[Tom Poje]

the announcement indicates

"Section 6057(b) requires the plan administrator of a plan that is subject to

the vesting standards of section 203 of the Employee Retirement Income

Security Act of 1974 (ERISA) to notify the Secretary of the Treasury of certain

changes relating to the plan and plan administrator. These changes are reported

on the plan’s Form 5500 annual return/report. Neither the removal of the

Schedule SSA from the Form 5500 annual return/report nor the creation of the

Form 8955-SSA affect this requirement. Therefore, a plan administrator should

continue to report changes in plan status on the Form 5500 annual return/report

for the plan year in which the change occurs in accordance with the applicable

instructions."

so as dumb as it may seem, it would appear you still report the person as an A in 2009 and then as a D in 2010, because of the requirements of 6057(b)

[ESOP Guy]

For what it is worth I stand by my first comment. I see the deadline as the later of the due date of the return or 8/31/2011. I don’t see any discussion that leads me to believe a terminating plan has a different due date for this form.

But if you read the notice (http://www.irs.gov/pub/irs-drop/a-11-21.pdf) it does say they will keep accepting form SSA until sometime in April. I assume they mean people have been sending in 2008 SSAs for 2009 and 2010, as there are no SSAs for those years. So if you feel the need to filing something by 3/31/2011 send in a 2008 SSA and apparently the IRS will accept that as good enough.

If one reads the instruction of the draft it would seem if a person should be an A on 2009 but paid by the time you file the 2009 you can just keep them off of the 2009. The instructions seem to be the same as the Form SSA. See the section titled "when not to report a partiicpant"

This is the only copy of the draft I can find on-line.

http://docs.google.com/viewer?a=v&q=ca...gFMym6_x8--7f7Q

[PFranckowiak]

Thanks where I was reading the 3/31 date was on the page of the draft instructions page 1 bottom - EXCEPTION.

Pat

[BeanCounterBlues]

Does anyone have any updated thoughts on the "do you have to report someone who would have been Code A in 2009, but is paid out" before the January 2012 filing deadline.

J. Wegesin stated during a conference that she would suggest just not reporting the person all. This was in Feb - March 2011 if I recall correctly. To me that seems the common sense way to go. She also caveated that was just her opinion, which I totally understand.

However I don't want to end up w/ a bunch of non reporting penalties if an auditing agent says otherwise three years down the road if the plan gets audited.

It seems better safe (eg report) than sorry, but this then requires a whole bunch of 8955's that seemingly I should be able to just skip and not charge the client for (at least in my practice).

If anyone has heard anything updated on this subject or has any thoughts as to how they plan to handle, would be grateful to hear your opinions.

Thanks!

[Tom Poje]

the Instructions, under WHEN NOT TO REPORT A PARTICIPANT

are quite clear (at least they seem to me to be clear) , a participant is not required to be reported if before the date the form is required to be filed the particpant is

1. paid all deferred vested benefit

2. returns to service

3. forfeits all deferred vested benefit

(emphasis mine)

since the form is not required to be filed as of today, anyone paid out before today would not have to be reported

Furthermore, you are permitted to combine 2009 and 2010. so would you report the person as an A for 2009 and repeat the name on the form as a D? that wouldn't make sense either.

[Guest jusducki]

I heard the filing deadline has been updated to January, 2012. Question - is there a minimum amount of deferred vested benefit? We have a few terminated employees who are due 25% of $400 - must they be listed? Also, must they be listed on the 8955-SSA if a terminated employee only has salary deferral money? Thanks.

[chc93]

the Instructions, under WHEN NOT TO REPORT A PARTICIPANT

are quite clear (at least they seem to me to be clear) , a participant is not required to be reported if before the date the form is required to be filed the particpant is

1. paid all deferred vested benefit

2. returns to service

3. forfeits all deferred vested benefit

(emphasis mine)

since the form is not required to be filed as of today, anyone paid out before today would not have to be reported

Furthermore, you are permitted to combine 2009 and 2010. so would you report the person as an A for 2009 and repeat the name on the form as a D? that wouldn't make sense either.

I agree with Tom. I also recall Janice's comment on not reporting terminated participants who are eventually paid as her opinion at that time. And I think the final instructions are clear.

We have a large DB plan that terminated in April 2010, and all benefits paid by May 2011. Participants who terminated in 2008 and later were never reported since 2008 was the last SSA filed, and 2008 terms were not required to be reported there. Since the 2009 form is not required to be filed until Jan 2012, I do not intend to report any participants terminated in 2008 and later as Code A AND Code D, instead they will not be reported. Only participants terminated in 2007 and earlier who were previously reported as Code A (and not yet reported as Code D) will be reported as Code D.

[Blinky the 3-eyed Fish]

Does anyone have any insight concerning the requirement to provide an individual statement to participants reported on the 8955-SSA? Technically, most monthly participant statements issued by John Hancock or similar firms have all the required information on the statement. Of course the context is lacking so showing a lump sum on a statement might not really meet the requirement to provide the “nature, amount and form of the deferred vested benefit to which the participant is entitled”. But then again I think of the reason that a statement requirement is there in the first place would be to let the participant know that they have this plan money. A monthly brokerage statement surely lets them know they have money and so maybe it does meet the requirements.

Is anyone taking that approach, relying on the brokerage statement as sufficient and not issuing a new statement with the 8955-SSA filing?

[Guest cbclark]

We have been wondering what we need for the defined benefit participants. Would the benefit calculation with the accrued benefits suffice? A letter? Our DB 5500 analyst has been sighing a lot....

[rcline46]

This requirement has been around a LOOOOONNNNNNGGGGG time. Remember that there used to be no requirement to issue a statement unless a participant requested one, and so the necessity for the SSA statement. Since PPA, statements are required periodically.

Most TPAs that I know issued statements every year on all plans. I remember an audit from long ago where the auditor requested to see said statement. Our annual statement satisfied the auditor.

I don't think this is a problem for most of us. Its only a problem where statement are not issued in violation of PPA.

[chc93]

Question on Codes A and D (taking over a plan)

As far as we can tell, vested terminated participants who terminated before 2008 were never reported on any SSA as a Code A (at least back to 2006 that we have copies of 5500's). Since the plan has now been terminated, we know that a lot of these participants were paid in 2010. Would you include these participants as a Code D on the 2009 SSA? If reported as a Code D, but was never reported as a Code A, does that raise a flag?

I saw ASPPA comments on the draft instructions that reporting of Code D appeared to be mandatory, and requested that the instructions be made clear that Code D was optional, as specified in regulations. I went through the final instructions, and cannot tell if Code D was still mandatory. Can someone point me in the right direction?

If Code D is optional, I realize that if the participant was previously reported as a Code A and never reported as Code D, he will probably get a letter from the SSA when he retires that he *may* have benefits in the xxx Plan, and it may be years from now... major pain, at least. We normally report participants as Code A, so no problem reporting as Code D. It's in takeovers, where we don't know if or when a participant was reported as a Code A, that concerns us.

Thanks...

[Tom Poje]

under Purpose of the Form (which is the very first part of the instruction) , bullet point 3 it says

"previously were reported under the plan but have been paid out or are no longer entitled to those deferred vested benefits"

I read that to say, if they were reported previously you need to put them on as a D. In fact, I think its quite plain it says that. (I guess I wonder, if it was purely optional, why have a code D anyway)

if they were never reported, then they 'weren't previously reported' and I see nothing in the instruction that says anything about reporting 'unreported terminees'.

if the person wasn't reported in a prior year and should have been, well, technically that is suppose to be $1 / day penalty unless one shows reasonable cause for the failure. not sure how that would be enforced, or even discovered. but I suppose if someone quits and tells the DOL they think they might have a benefit somewhere, that might lead to an ugly discovery.

[chc93]

Tom... thank you for your reply. I agree with your points. The question I have is for participants that we don't know if they were previously reported as Code A (remember, take-over plan). As you say, if they were never previously reported, that's a problem itself. But, since we don't know if they were previously reported, should we report them as a Code D now since we know they were paid. Any thoughts?

[Tom Poje]

my understanding was a code D simply told the SSA to take these folks off a previously reported list. I have no idea If they had never been reported, so I put them down 'assuming' the prior administrator did their job and reported them. If they hadn't and the IRS took the trouble to investigate I'm not quite sure what would happen.

[chc93]

Thanks again, Tom. We're also inclined to include them as a Code D, assuming they were previously reported correctly as a Code A.

[Bird]

So for those Code D participants, if you read the instructions to line 6 (the count on page 1); they are not properly counted in 6a or 6b, as I read it. Do we not worry about a mismatch between the number "required" to be reported on page 1 and the actual number reported on page 2? (I know the instructions are not changed from prior years and I suspect I've done it both ways and it probably doesn't matter!)

[Tom Poje]

I tried the form that is currently availabe on FT William.

the edit check will have a hissy-fit (or whatever) if the count on page 1 doesn't equal the number of bodies on page 2.

(not that the edit check should influence how you code things.......)

(again, my reading of the instructions of who counts as a participant with a deferred vetsed benefit includes those who were previously reported and are no longer entitled to a vested benefit (3rd bullet point, first set of bullet points on the instructions)

[Bird]

(again, my reading of the instructions of who counts as a participant with a deferred vetsed benefit includes those who were previously reported and are no longer entitled to a vested benefit (3rd bullet point, first set of bullet points on the instructions)

I see that but the specific instructions for line 6a/b are pretty clear (to me) that such participants are not on either line. It's like you should (must) report them but for whatever reason they don't get counted on page 1. Like I said, it probably doesn't matter either way...

[Guest jusducki]

I called the IRS this morning - held for 55 minutes - to ask if Code D is or is not included in the participant count on page 1. Mrs. Keys told me no, Code Ds are not counted as they are already gone from plan and are not participants...question 6a only deals with those with vested deferred benefits. I'm going with her answer....we've got some 8955-SSA schedules that only have Ds so the participant count is 0.

[Tom Poje]

well, you have more patience than I do, I waited awhile and gave up. I was going to ask that and also

if the plan is terminated, all assets paid out, the company is going, there is no longer any sponsor, just who the heck signs the form?

on the brighter side of things I've tried writing a Relius report to pull the participant data and create a file to upload into FT William. appears to be working, ran it across the whole database (which took about an hour), but I think I'm set on all the DC plans. have someone else looking at it so see if he has as much success.

[Tom Poje]

the FT William system expects the value on 6 to match the count of bodies on page 2 for the following reason (I asked):

You can overlook our edit checks if you plan to paper file. However, if you use the FIRE system or our fulfillment system the participant count on line 7 must match the total number of participants on your page two's even if the code entered is 'D'. This is due to the fact that the FIRE system does the same check to make sure Line 7 has the correct value. Our edit checks are designed to ensure successful FIRE submissions

.........

so you can't win. must have been an actuary who wrote the question and the answer

"just what do you want it to be!"

[Bird]

I called the IRS this morning - held for 55 minutes - to ask if Code D is or is not included in the participant count on page 1. Mrs. Keys told me no, Code Ds are not counted as they are already gone from plan and are not participants...question 6a only deals with those with vested deferred benefits. I'm going with her answer....we've got some 8955-SSA schedules that only have Ds so the participant count is 0.

Thanks for doing that!

You can overlook our edit checks if you plan to paper file. However, if you use the FIRE system or our fulfillment system the participant count on line 7 must match the total number of participants on your page two's even if the code entered is 'D'. This is due to the fact that the FIRE system does the same check to make sure Line 7 has the correct value. Our edit checks are designed to ensure successful FIRE submissions

.........

so you can't win. must have been an actuary who wrote the question and the answer

"just what do you want it to be!"

Good grief...

[rcline46]

Tom, getting code A stuff from Relius should (yeah) be easy, how about the code D people - any luck there?

[Tom Poje]

yep. report has been written, had the extreme benefit of having Austin check some stuff. I thin kwe are both well pleased with the results. The report seems to be working real well. I even ran it across the entire database which took about an hour and generated X number of reports. I believe only those plans actually needing an SSA. This is not written for DB plans, but I suppose it would be easy enough to modify that area.

quite interesting, if report is run over a 2 year period, my D people from 2009 appear. His do not appear. he has a request into Relius about this, we were sort of holding off on posting the report until then. (though he wrote a separate report to pull the D people for that year anyway.)

according to FT William if you run 2 years, then you would put the 2009 people in 6a and the 2010 people in 6b.

so I've recently added a counter as best I could. you still create the excel file, and then sum up the counters. I've kept the D and A separate.

have no idea if people are going to put A people only in the count or combine the A and D people.

as indicated above, one person on the support line at the IRS said count A only, but if you file electronically you have to combine. I think I will combine the numbers for my filings. At least I can always say "But if I filed electronically you require it done that way!"

of course, you could always run the report for 2009, fill out your forms. and then run the report for 2010 and fill out the forms. some of the people you put down as an A in 2009 you would then put down as a D in 2010.

of course then you have twice as much paperwork, but what the heck.

[Tom Poje]

the 'illogic' of the body count (at least of including "D", as required by electronic filing) arises in the following situation in which you are filing over a 2 year peiod. (or maybe its simply things weren't thought out properly when they said we could file over a 2 year period)

someone quit in 2008, so they need to go on line 6a.

someone quit in 2009, so they would be voulntraily reported A on line 6b.

that makes sense since I am filing over a 2 year period, if the form had been ready in 2009 I could have reported this person.

someone else reported years ago was paid out in 2010. since the form is being filed over a 2 year period you need to report them as a "D". If the form had been produed timely and I had filed in 2009 I wouldn't even know about this person being paid out at the time I would have filed.