Form 8955-SSA

[Guest ERISAphile]

Does the Notice/Statement that is required to be sent to participants listed on Form 8955-SSA have to be sent to individuals listed with Code D, as well as Code A? It seems that the D's dont need the notice because they already received notice that they had a deferred vested benefit. The IRS has not addressed this directly. The conservative approach is to send the Statement to both A's and D's, but would omitting the D's be reasonable in view of the lack of guidance?

[chc93]

I would think that the Code A's got their Notice/Statement when they were reported as Code A's. So I don't think these same Code A's who will now be reported as Code D's need another Notice/Statement. I thought that the Notice/Statement provided when they were reported as Code A's was the requirement. In fact, if the Code A's doesn't get paid for a few years, I don't think they need a Notice/Statement each year... again, only in the year they were reported as Code A's. Any other thoughts?

[Tom Poje]

my guess is that you provided the necessary info when you provided the distribution notice.

the IRS just indicated this in a new Q and A

A plan administrator may answer “yes” to question 8 if the required information was timely furnished to participants in other documentation such as benefit statements or distribution forms. A separate statement designed specifically to satisfy this requirement is not required.

http://www.irs.gov/retirement/article/0,,id=252298,00.html

[Guest ERISAphile]

I would think that the Code A's got their Notice/Statement when they were reported as Code A's. So I don't think these same Code A's who will now be reported as Code D's need another Notice/Statement. I thought that the Notice/Statement provided when they were reported as Code A's was the requirement. In fact, if the Code A's doesn't get paid for a few years, I don't think they need a Notice/Statement each year... again, only in the year they were reported as Code A's. Any other thoughts?

For Code A's who don't get paid for a few years, I agree that the Notice/Statement only needs to be sent in the first year that they are a Code A.

As for Statements to the Code D's, SunGard Relius states in its Pension Technical Update 8/5/11:

"It's unclear if a plan must provide an individual statement to a participant who was previously reported on SSA (Code D) but whose deferred vested benefit is no longer held by the plan (generally because the plan has paid the benefit). The regs require the plan to provide each participant with respect to whom information is required to be filed on Form 8955-SSA a statement describing the benefit to which the participant is entitled. The instructions now require a plan to report participants subject to Code D reporting. However, the regs continue to indicate that reporting of such participants is optional. Regardless, providing a statement to a participant who is no longer entitled to a benefit from the plan (Code D) would seem to be an unnecessary exercise."

Note that in its FAQ yesterday, clarifying that previous communications can be relied on to satisfy the notice requirement, the IRS did say:

"the notice to plan participant does not need to include the participant's social sec. number, the codes on page 2 of the Form 8955-SSA used to identify previously reported participants,....." This would indicate that the IRS requires the form to be sent to the D's.

[Guest ERISAphile]

my guess is that you provided the necessary info when you provided the distribution notice.

the IRS just indicated this in a new Q and A

A plan administrator may answer “yes” to question 8 if the required information was timely furnished to participants in other documentation such as benefit statements or distribution forms. A separate statement designed specifically to satisfy this requirement is not required.

http://www.irs.gov/retirement/article/0,,id=252298,00.html

[Guest ERISAphile]

The IRS clarification yesterday was for plans that sent previous notices of benefits (such as quarterly statements from defined contribution plans). My question is about defined benefit plans that haven't sent a recent statement. I know that they have to send the individual statement to the A's, but I'm not sure about the D's.

[chc93]

Whether DB or DC, a participant would be a Code D if he got paid during the form year to be reported. As such, he should have received a distribution election form which the IRS FAQ says can suffice as the Notice/Statement within 180 days and before he got his actual distribution. So even for a DB with 3-year notice cycles and no recent Notice/Statement, he should have received the distribution election form since he did get paid, so shouldn't this meet the requirement for Code D's?

[Guest ERISAphile]

my guess is that you provided the necessary info when you provided the distribution notice.

the IRS just indicated this in a new Q and A

A plan administrator may answer “yes” to question 8 if the required information was timely furnished to participants in other documentation such as benefit statements or distribution forms. A separate statement designed specifically to satisfy this requirement is not required.

http://www.irs.gov/retirement/article/0,,id=252298,00.html