Money Purchase Plan Certificate of Deposit in a Taxable account?

[caryn22359]

My client has both a SEP and Money Purchase Plan. She went to the bank and opened Cetificate of Deposits for both MPP and SEP for the 2012 contribution.

The bank issued 1099INT for the interest in both plans. This has been going on for a few years. The 1099'sINT have been issued in the name of the Corporation. I looked at the original paper work and it said the name of the co. EX ABC F/B/O Joe, however they have been issueing the 1099INT .

The assets in the pension plans are handled by the employer.

I would like to resolve this without making an additional mess. Thank you.

[Lou S.]

Why does your client have both a SEP & MPPP?

That aside I think a similar issue came up about a week ago. Making sure the the insitution knows these are tax exempt accounts, possibly by filing an update W-9 with them should stop future 1099s.

[Lou S.]

Try this thread http://benefitslink.com/boards/index.php?/topic/52983-investment-firm-refuses-to-correct-1099-div/

I think the issues are simialr to what you are decribing here.

[Bird]

It's not that big of a deal for the Money Purchase plan. For the future, make sure the bank knows it is a qualified plan. I'd rate the SEP a bigger "deal" because if it's a SEP then it should be an IRA account, and there's no way an institution is going to mess that up by issuing a 1099-INT. Someone with a clue will have to look at the titling and sort that out.

[caryn22359]

Thank you. Unfortunately the bank issued a 1099int in a SEP plan as well. When my client opened these accounts (MPP and SEP) plans the original paper worked stated thats where it should go. A corrected W9 will fix the MPP, but will it fix the SEP-IRa employer plan.?

[Bird]

A corrected W9 will fix the MPP, but will it fix the SEP-IRa employer plan.?

I doubt it. If I had to guess, the registration for the plan that is supposed to be a SEP says "profit sharing." Or else what you are saying is supposed to be a SEP really is a profit sharing plan. Someone is going to have to find some documents and compare them to the registrations and figure out how to get the bank to re-register/fix everything. I doubt it will be easy.

[IRA]

^{For the MPPP, the trustee should be the owner of the account. The Bank probably won't like to see that the acount is for a qualified plan if anyone else owns the account.}