5% Reportable Transactions in Defined Contribution Plans

[pitkofsky]

2520.103-6(f) appears to exclude individual account plans, e.g. defined contribution plans from the 5% reportable transactions reporting requirement.  Can someone confirm this?   If not, what is required?   

[Kevin C]

The exclusion is for participant directed transactions in a DC plan.

Quote

 

(f) Special rule for certain participant-directed transactions.

Participant or beneficiary directed transactions under an individual account plan shall not be taken into account under paragraph (c)(1) of this section for purposes of preparing the schedule of reportable transactions described in this section. For purposes of this section only, a transaction will be considered directed by a participant or beneficiary if it has been authorized by such participant or beneficiary.

 

 

[BG5150]

So, if there was a fund change and all of Fund A was moved into Fund B and the amount moved was, say, 12% of plan assets, it needs to be reported?

[My 2 cents]

30 minutes ago, BG5150 said:

So, if there was a fund change and all of Fund A was moved into Fund B and the amount moved was, say, 12% of plan assets, it needs to be reported?

I think moving all of Fund A into Fund B is precisely the sort of thing they want to see in the 5% transactions.  While I do not work on 401(k) plans, it would be my expectation that benefit payments in excess of 5% of the total value would NOT be reportable, even if paid to only one person (although sale of the assets needed to pay it could have to be reported).