8955 SSA

[g bennycon]

Is there a Participant Statement requirement for those Participants who are entered as a Code D on a 2009 8955 – SSA Form?

[ESOP Guy]

It would seem to be unclear, but everyone seems to agree what would the point of giving a statement to "D" people.

Here is Relius' take on it, see 3rd question.

http://www.relius.net/News/TechnicalUpdates.aspx?ID=578

[Tom Poje]

on the other hand (despite being nonsensical) I tripped across the following

http://www.enrolledactuaries.org/ea2011/2011_Green_Book.pdf

Participant Notification: Notification to Nonvested Terminated Participants

ERISA 209(a), as amended by WRERA, requires, among other things, that participants,

including terminated participants, receive a “report, in such manner and at such time as

may be provided in regulations prescribed by the Secretary.” Further, such report “shall

be in the same form, and contain the same information, as periodic benefit statements

under section 105(a).”

a) In absence of regulations, are reports under section 209(a) required for

terminated participants who terminate without a vested benefit?

b) If the answer to (a) is yes, would the statements need to provide an

explanation of items such as “permitted disparity”?

EBSA STAFF RESPONSE

Section 209(a)(1)(B) of ERISA requires the furnishing of a benefit report upon an

individual's termination of service with his or her employer. In the absence of

regulations, EBSA staff believes that good faith compliance with the statute is required.

In addition, section 209(a)(1) provides that a benefit report shall contain the same

information as is required in an individual benefit statement under section 105(a) of

ERISA. Neither section 105 nor 209 contains special rules for nonvested participants.

Thus, in the absence of guidance under either ERISA 105 or 209 by the Department to

the contrary, EBSA staff is of the view that plan administrators must furnish benefit

reports to nonvested participants upon termination of service. In addition, furnishing of

an individual benefit statement (or, in the context of this question, a benefit report under

section 209 of ERISA) that does not include an explanation of permitted disparity, if

applicable, would not be consistent with the principles of good faith compliance. For

other guidance on information required under section 105, see the EBSA Field

Assistance Bulletin 2006-03.

[ESOP Guy]

Yes we do constantly say logic and the rules for qualified plan do not go together often.

So far the firm I am working for appears to be willing to take the risk of not sending a statement to someone who is a "D".