EIN/TIN Requirements for Cash Balance Plans

[SwimmingInBowelsOfERISA]

I've read some older dialouge (2007 and earlier) here about the requirements for a separate EIN/TIN for plans, and I've even recently posted on a dissimilar situation from what I'm asking now.

Since the schedule P has been eliminated, I've seen most custodial trust accounts for newer pension/cash balance plans setup with whatever firm (TD, Schwab, etc.) using the ER's EIN to setup the ERISA trust account. The "experts" at these firms also acknowledge that no separate EIN is required. However, when I go to the IRS website, it appears to REQUIRE a separate EIN for the trust.

It appears that there is a wide range of thought on this subject, and even two ERISA attorneys I've spoken with recently have questioned the necessity to establish a separate EIN other than a possibility of income reporting issues. Does anyone have any substantive clarification on this?

[My 2 cents]

This question doesn't really relate specifically to cash balance plans, does it? Same issue applies to plans in general, no more and no less than to cash balance plans.

[SwimmingInBowelsOfERISA]

This question doesn't really relate specifically to cash balance plans, does it? Same issue applies to plans in general, no more and no less than to cash balance plans.

Correct, although the plan I'm working on at the moment happens to be a CB plan; ERISA trusts in general.

[david rigby]

No expert am I. Since the trust is the entity that (eventually) makes a payment (and possibly does tax withholding), shouldn't it have a unique EIN/TN? A 1099-R makes more sense if it shows the name and EIN of the payor, rather than the plan sponsor or the bank that holds the money, etc.

[SwimmingInBowelsOfERISA]

No expert am I. Since the trust is the entity that (eventually) makes a payment (and possibly does tax withholding), shouldn't it have a unique EIN/TN? A 1099-R makes more sense if it shows the name and EIN of the payor, rather than the plan sponsor or the bank that holds the money, etc.

David, pretty sure that is the exact response I saw you post from an earlier thread. Thanks for that but I'm seeking a more authoritative response. No disrespect intended.

[Bird]

A trust (or probably more commonly a "plan and trust") is a separate entity and should have a separate ID number for reporting purposes.* If you're looking for a specific cite, I don't think you're going to find one - it's like asking if an individual who owns an unincorporated business and an incorporated business needs separate ID numbers; there's no need for the IRS to publish guidance that specific.

*If there is not going to be any reporting by the trust, then we don't bother - e.g. a plan on a recordkeeping platform will typically have distribution reporting done by the recordkeeper. If the investment firms are handling distribution reporting, then maybe what they suggest is ok (but I doubt that's the case).

I do seem to recall that a plan may use the sponsor EIN for tax reporting...I don't have a cite. But running the risk of getting payroll withholding and distribution withholding mixed up, and (I believe) subjecting the plan to the timing requirements based on dollars withheld for payroll is simply stupid.

I learned long ago not to use advice from TD Ameritrade and Schwab and their ilk, and in fact to proactively anticipate bad advice and head it off at the pass.

[AndyH]

To the poster, the link that you cited above says a TIN should be obtained in order to properly report certain things. If a plan needs to report those things, and wants to do it properly, then it should obtain a TIN per the IRS. Why is complicated and in need of further "authority"?