8955-SSA Terminated Plan

[PFranckowiak]

I have a plan that terminated and I need to file an 8955-SSA for 2015 and then the short plan year 2016. Can I just put all the D's on the 8955-SSA for 2015 and call it good? or do I have to file two forms. Will the IRS system except an 8955-SSA for 2016 on a 2015 form?

Thanks

P

[Tom Poje]

since the instructions say 'in general' I interpret that to mean a little leeway on the circumstances.

under the instructions when not to report someone is the line

'before the date the form is required to be filed' (or put another way "If you have some knowledge about someone before the form is required to be filed take it into consideration when filing the form.
so you have someone who was paid out in 2016 but before the 2015 form was required to be filed.

I would read that to mean you could report that person as a D on the 2015 form. Granted the person in this case was already reported as an A, the whole purpose of reporting someone as a D is to get him 'Deleted' from the SSA system. in the great scheme of things it shouldn't matter whether you report that person as such in 2015 or 2016.

In general, for a plan to which only one employer contributes, a participant must be reported on Form 8955-SSA if:
1. The participant separates from service covered by the plan in a plan year, and
2. The participant is entitled to a deferred vested benefit under the plan.
When Not To Report a Participant
A participant who has not been previously reported is not required to be reported on Form 8955-SSA if, before the date the Form 8955-SSA is required to be filed (including any extension of time for filing), the participant:
1. Is paid some or all of the deferred vested retirement benefit
2. Returns to service covered by the plan and/or accrues additional retirement benefits under the plan, or
3. Forfeits all the deferred vested retirement benefit

[BG5150]

When Not To Report a Participant
A participant who has not been previously reported is not required to be reported on Form 8955-SSA if, before the date the Form 8955-SSA is required to be filed (including any extension of time for filing), the participant:
1. Is paid some or all of the deferred vested retirement benefit
2. Returns to service covered by the plan and/or accrues additional retirement benefits under the plan, or
3. Forfeits all the deferred vested retirement benefit

Why wouldn't someone who only took SOME of his or her benefit not be reported?

[PFranckowiak]

I need to remove people with a code D? Some were paid in 2016, would like to put them on the 2015 form as being paid with a D so I don't have to file the 2016 form.

[Tom Poje]

if someone had been coded an A (Active) then they need to be removed coding them a D (Delete)

if they were never coded an A you would never need to report them as a D

BG - if the person was never reported as an A, he is not on the SSA list, so if he returns to work there is no need to report him

[PFranckowiak]

Tom- they were reported as D in the past. Plan terminated and participants paid out in 2015 and 2016. Can I put the D people for 2016 (short year) on the 2015 form, or do I have to do a form for the short year too? Will the IRS Fire system accept the short year form for 2016 on a 2015 form?

Thx

P

[Tom Poje]

I'm confused.

If they were reported as a D in the past then they should have been 'removed' from the system, and unless they were rehired and then reported as an A they shouldn't be on the system.

If you report the people as a D in 2015 then you shouldn't need to report them again.

e.g. if you have a db plan and someone starts receiving a monthly benefit, you only report them as a D once, not every year (or at least that is how I understand how it works)

even though the person was paid out in 2016, if I knew about it and hadn't filed the 2015 form, I would put him on the 2015 form in a situation like this (because we file electronically in a batch with other forms)

again, as the instructions note if you had someone that should have been an A but you knew he was paid out you wouldn't bother putting him on the 2015 form as an A and then as a D in 2016. I don't see this being much different. you know the person has been paid out so it shouldn't matter whether you put him on the 2015 form or the 2016 as long as he gets pits on one of them. I don't expect the instruction to list every single possibility that could arise.

[PFranckowiak]

Thanks - they were on as an A in prior years before 2015 and we are just cleaning it up as all were paid during 2015 and 2016. All on the form will be Ds in 2015 and 2016, so I think I will just combine them and put them all on the 2015 and be done with it.

Thanks - I didn't explain clearly, I see where I put a D where it should have been an A!

P

[bzorc]

As an aside, I filed a 2016 short year (1-1-16 to 4-30-16) Form 8955-SSA through FIRE, and it was accepted.

[AndyH]

Separate but related question:

In connection with a plan termination, some participants (actives and vested terms) were annuitized through a group deferred annuity contract (purchased in 2015).

Would you report the vested terms as code D? Anybody as Code A?

[chc93]

I think all participants that were annuitized would be reported Code D. For Code A, the SSA will send a letter (when SS benefits are applied for) that generally states that you may have benefits in Plan X, of which Plan X has already discharged their liability, so the participant doesn't have any benefits in Plan X. I think the company that has the group deferred annuity contract is responsible for contacting the participant at the proper time.

[david rigby]

Would you report the vested terms as code D? Anybody as Code A?

It depends. If the VT's previously reported, then report with code D. If not previously reported, ignore them.

[AndyH]

Thanks for the comments. There are valid arguments for both approaches IMHO.