Form 18? Profit Sharing Contribution

[emmetttrudy]

A TPA provides what they call a "Form 18" with each of their reports to the client. The Form 18 details the profit sharing contribution by participant, and contains a signature line at the bottom for the Trustee.

I have never seen this before. Is anyone familiar with this form? Is it required? Could it jsut be something the TPA developed for the client to "memorialize" their profit sharing decision? Any insight would be appreciated.

[BG5150]

If a profit sharing contribution is discretionary, the contribution must be authorized each year by the Trustees. Usually, it's just the dollar amount. In a plan where the PS is allocated by groups, the declaration should include amounts for each group.

maybe this is something along those lines?

[emmetttrudy]

quite possibly. i guess it depends on what the definition of authorize is? By simply contributing the profit sharing is that authorization? Signing a form just seemed like an extra step to me.

[Lou S.]

For cross tested plans we send out a resolution approving the contribution allocation. Doesn't hurt to have if the IRS audits the Plan. But technically I don't think it is required.

[jpod]

It would be very odd if a discretionary contribution is authorized by the Plan trustee(s). I assume you mean the Plan sponsor/employer.

[BG5150]

It would be very odd if a discretionary contribution is authorized by the Plan trustee(s). I assume you mean the Plan sponsor/employer.

You are correct. That's what I meant.

[Gadgetfreak]

BG5150 is correct. For cross-tested plans, a resolution is needed each year with the allocation by participant. The easiest way I found to do this is to make the resolution more generic and reference an attached schedule (which will be the allocation report).