Do Not-For Profits file Form 5330 for late MPP contrib

[Guest jc1457]

Hi,

We have a Not-For Profit Organization which has a money purchase plan. It was discovered recently that 2 part time employees were missed and improperly excluded from the Plan. We are correcting and filing under VCP.

Regarding Form 5330 for the excise tax on the funding difficiencies, does this apply to not for profits? I have the instructions to the Form 5330 and the instructions do not mention that this does not apply to Not For Profits. I'm not sure if I'm missing something.

Thanks!

[Guest On Hiatus]

There is no specific rule exempting non-profits from the 5330. However, only plans qualified under 401(a) are subject to the excise tax. If you have a MPP that is really a 403(b) plan, then you are not subject to the tax.

[Guest jc1457]

Hi,

We have a Not-For Profit Organization which has a money purchase plan. It was discovered recently that 2 part time employees were missed and improperly excluded from the Plan. We are correcting and filing under VCP.

Regarding Form 5330 for the excise tax on the funding difficiencies, does this apply to not for profits? I have the instructions to the Form 5330 and the instructions do not mention that this does not apply to Not For Profits. I'm not sure if I'm missing something.

Thanks!

Thanks so much. I came to the same conclusion that you did yesterday but just wanted to double check that my understanding is right. Thank you again.

[SheilaD]

Hi,

We have a Not-For Profit Organization which has a money purchase plan. It was discovered recently that 2 part time employees were missed and improperly excluded from the Plan. We are correcting and filing under VCP.

Regarding Form 5330 for the excise tax on the funding deficiencies, does this apply to not for profits? I have the instructions to the Form 5330 and the instructions do not mention that this does not apply to Not For Profits. I'm not sure if I'm missing something.

Thanks!

Thanks so much. I came to the same conclusion that you did yesterday but just wanted to double check that my understanding is right. Thank you again.

According to the ERISA outline book the penalty no longer applies to Money Purchase Plans post 2007. You must correct EPCRS which it seems you are doing but the 5330 does not apply.

[Guest jc1457]

Wow Sheila, thank you so much. I have so much research materials available to me and did not catch what you just pointed out. Our ERISA outline book needs to be updated - our version is from 2002!

I just researched and found the changes effective in 2007. I agree with you completely. Pre 2007 the penalty applies. After 2007, the penalty applies to DB plans only.

We will be updating our ERISA outline books asap.

Thank you again for your time and help on this.