8955-SSA filing for 403b plans

[mbozek]

Is form 8955-SSA required where vested benefits in a 403b plan are held in a individual or group annuity? P 3 of 8955 instructions provides that reporting is not required if benefits are paid before filing date but there is no definition of "paid". If cash is distributed the benefits are paid. Why should there be a distinction in reporting if the vested benefits are held by a third party outside the control of the plan administrator since the plan does not have beneficial ownership of the vested benefits in either case?

If reporting is required on 8955 then at retirement participant will believe that supplemental benefits are payable from the plan in addition to the benefits held by insurance co.

[Tom Poje]

They did add 2 new items to the 8955-ssa Q and A pertaining to 403bs. don't know if that helps or not

Does the Form 8955-SSA filed for 2009 by a 403(b) plan sponsor have to report participants who separated from service prior to 2008 with a deferred vested benefit under the plan?

Generally, no. Form 8955-SSA filed for 2009 generally only has to report participants who separated from service in 2008. Thus, participants with a 403(b) contract or account who separated from service prior to 2008 are not required to be reported on the Form 8955-SSA filed for 2009 (or for any subsequent year).

However, a participant should be reported on the Form 8955-SSA filed for 2009 if that participant separated from service in a year before 2008 and began receiving payments under the contract or account, but the payments stopped in 2008 before all of the participant’s benefits were paid. See the Instructions for 2009 Form 8955-SSA. See also Question and Answer 2 for an exception that applies even in the case where payments stopped in 2008.

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Does a 403(b) plan sponsor have to report all participants who separated from service after 2007 with a deferred vested benefit under the plan?

No. A plan sponsor is not required to report a separated participant if the participant’s deferred vested benefits are attributable to an annuity contract or custodial account that is not required to be treated as part of the section 403(b) plan assets for purposes of the reporting requirements of ERISA Title I, as set forth in DOL Field Assistance Bulletin (FAB) 2009-02.

For this exception to apply, (1) the contract or account would have to have been issued to a current or former employee before January 1, 2009, (2) the employer would have ceased having any obligation to make contributions (including employee salary reduction contributions), and in fact ceased making contributions to the contract or account before January 1, 2009, (3) all of the rights and benefits under the contract or account would be legally enforceable against the issuer or custodian by the participant without any involvement by the employer, and (4) the participant would have to be fully vested in the contract or account. For further information, please see DOL FAB 2009-02,

[mbozek]

As I understand it, the 2009 8955 must include information on any participant who terminated in 2008 with a vested benefit held in an annuity contract in a 403b plan subject to ERISA where the participant did not receive a lump sum distribution. The participant will receive a notice of non existant vested benefits under the plan when SS benefits commence even though the participant will receive notices of the amount of benefits from the annuity provider.

The 2010 8955 covers the same situation for 2009.

Participants who terminated with a vested benefit from an ERISA 403b plan before 2008 will never be reported to the IRS along with all participants who terminate from the 90% of 403b plans that are exempt from ERISA.

[austin3515]

We reported everyone for a very simple reason. In 5 or 10 years, we will not have to keep track of who we reported and who we did not. We have much more limited engagements on these 403b's than we do for 401k's, so we dont have everyone's termination dates listed neatly in our Relius Summary of Accounts, the way we would in our 401k plans. For a lot of these plans, all we are engaged to do is a 5500 and an SSA.

[Tom Poje]

we listed everyone as well. It was simply easier to do since I could pull all the data from the software.

in addition, since the auditors look at the report, it was easier to report everything rather than trying to pull out the people from 1/1/09.

the account reports from the investment house I think are formatted in hieroglythics, which is even more fun for the auditors and me.