Change in definition of 4l on Schedule H - audit trigger?

[mandmeickhoff@msn.com]

The 2015 5500 updated the definition of line 4l on the Schedule H to

Line 4l.

You must check “Yes” if any benefits due under the plan were not timely paid or not paid in full.

This would include minimum required distributions to 5% owners who have attained 70½ whether or not retired and/or non-5% owners who have attained 70½ and have retired or separated from service, see section 401(a)(9) of the Code. Include in this amount the total of any outstanding amounts that were not paid when due in previous years that have continued to remain unpaid.

Does anyone know why this was not included in the "Changes to Note" in the 2015 instructions? It does not appear to be optional.

[My 2 cents]

Based on the instructions as revised, wouldn't a large majority of plan filings need an answer of "yes"? How would that be quantified? If a plan has 25 terminated participants over normal retirement age due payments who have not start receiving them because their whereabouts are not known, with 8 of them over age 70 1/2, how much should be shown? Given the lack of specificity in the prior instructions, if the question had always been answered "no", should there be amounts from previous years?

[mandmeickhoff@msn.com]

Exactly. This is causing some anxiety to say the least, first in trying to get to a figure and then the impact of reporting altogether and causing an audit trigger. It seems as though the DOL should have provided more time for Plan Administrators to prepare for the definition change.

[Belgarath]

Interesting. So, for 2014, if you had the situation that My 2 Cents mentions (lost participants who have not received otherwise required RMD's) how would you have answered that question?

Can one reasonably interpret the question, based on the new instructions to the 5500, to still say that the plan hasn't "failed" - in other words, it is only a "failure" if the plan COULD make distribution, but didn't - and therefore, since it was not possible to make the distribution, there's no "failure" and therefore you can reasonably answer "no"?

[My 2 cents]

As the instructions previously read, wouldn't "answer yes if the plan did not have enough money to pay all benefits when due" have been a reasonable interpretation in deciding whether to answer yes or no?