Terminating a small calendar year plan for 2014 when assets were not fully liquidated until 2015

[Lori H]

A plan sponsor of a calendar year plan is insisting on 2014 being the final plan year and wants the 5500 to reflect that. However, all the plan assets were not distributed until the second week of the current plan year. I am of the opinion this would be a red flag since participants would be receiving 2015 1099's on a plan that did not file a 2015 Form 5500. The sponsor is just not wanting to pay another year of admin fees.

[Lou S.]

Show the early January payments as a payable at 12/31/14?

Not sure if technically correct but we've done that in the past when 1 or 2 final distributions are paid the 1st week of January due to "processing delays" with the fund house.

Or stick to your guns and show assets at 12/31/14 and tell then they can file the final return for 2015 themselves or pay you to do it.

[Lori H]

ok, thanks. I have no problem showing the plan at $0.00 at 12/31 just didn't want that to come back and possibly haunt the sponsor.

[david rigby]

Neither you nor the sponsor can "bend" the calendar.

[ESOP Guy]

I have done the payable thing also but I agree it isn't a very good answer.

I am not sure what you mean the sponsor doesn't want to pay another year's admin fees. It would seem like the only additional fees would be a 5500. I don't see why you would have to do any other administration acitities. You don't have to do any testing, work with a census, depending on the facts there wouldn't even be earnings to allocate. So it would seem like the 2015 fees ought to be fairly minimal. .