1099-R: being the payer and the payee at the same time

[AlbanyConsultant]

I took over a plan last summer with assets in self-directed brokerage accounts. This week, the broker confirmed that his firm does the 1099-R... and they also did the tax withholding. I expected that meant they did it like a mutual fund product and used their own TIN, but no, they deposited it (presmably electronically) by using the participant's SSN. So that already sounds... odd. I asked them to confirm, and they admitted that the 1099-R they will prepare will have the SSN as both the payer and the payee. They are saying that they do it that way for a bunch of plans and think it's OK so they insist on not issuing it, even over my objections.

I pushed further and asked him to confirm that they are doing the 945. "Nope." So besides the dropped ball problem, does this mean that someone (read: me) has to prepare a 945 for the employee? Doesn't that seem strange?

Has anyone else seen this kind of thing?

[PensionPro]

Has anyone else seen this kind of thing?

No never seen a 1099-R with participant as payer.

[BG5150]

Sounds like the account was not registered as a plan account, but a regular ol' brokerage account.

[Bird]

Yes it seems strange - beyond strange - and I don't think I would trust the broker's statement that "they" prepare the 1099-R that way, if at all. BG might be right about them being registered as regular brokerage accounts, but then they wouldn't be set up for 1099-Rs.

[AlbanyConsultant]

Just to follow-up...

This sounded so strange that I eventually got a manager at said brokerage firm. He said that the person who told me that had no idea what he was talking about, usually makes things up instead of finding out the right answers, and shouldn't be trusted. They handle all tax reporting (in a manner much more reasonable than I was originally told).

Sounds like a valued employee, right?

[Bird]

Ha. I bit my tongue and didn't way what I really wanted to - "He's a broker so he could be stupid, lying, or both."