missing information for 5500

[khr]

We are helping a client who is managing a new facility with a separate 401k plan where it was discovered that they have not filed the Form 5500 for a couple of years. We are working on gathering the information to file the forms;however, we are missing some key pieces such as contributions during the years as well as year end balances.

What is an option for filing the Forms while missing holes of data?

[Doghouse]

There is no sanctioned option. The plan administrator is signing under penalty of perjury that "this return/report... to the best of my knowledge and belief, is true, correct, and complete." They may have to do the best they can with a lenient interpretation of that.

[My 2 cents]

There is an undeniable duty on the part of the sponsor to maintain adequate records. The sponsor, who is your client, really must be able to provide you whatever information is needed for you to perform your duties properly. Granted, it's an imperfect world, but that does not, by itself, excuse negligence on the part of the plan fiduciary.

Sorry if I am on the grouchy side - it's been a tough week.

[ESOP Guy]

I guess I am having a hard time on how they don't know the ending balances. How did someone produce the participant statements for those years? The ending balances in a 401(k) plan ought to be the sum of those statements.

Once again did they produce W-2s? They had to know the 401(k) amounts then. Have the payroll records been lost? Did they take a deduction for any match on a tax return?

As noted above the world is imperfect so I can see how after years the data might no be as easy to get as one would like but it seems like the data has to exist.

[RatherBeGolfing]

There is an undeniable duty on the part of the sponsor to maintain adequate records. The sponsor, who is your client, really must be able to provide you whatever information is needed for you to perform your duties properly. Granted, it's an imperfect world, but that does not, by itself, excuse negligence on the part of the plan fiduciary.

Sorry if I am on the grouchy side - it's been a tough week.

You are absolutely correct.

It may be inconvenient and costly to recreate the wheel, but you really have no other choice. This is information they are required to have and are required to provide on the return.

Absent a fire/flood/[insert disaster here] that destroyed all paper and electronic records of the documents needed, I can't think of a reason why it can't be done.