SAR for final 5500

[Guest Ray Williams]

Is a SAR required when filing a final 5500? The DOL reg says that the report must be given to all " participants and beneficiaries receiving bebefits under the plan". After the plan has been terminated and all participants and/or beneficiaries paid out, is there anyone left to whom a report is due? Normally this is not a problem, but with Hyperpreps annoucement that its SAR-W program will not be released until the month after shipping the R forms for 1999, I would like to at least clear out all of my terminated plans now, rather than waiting another month or more.

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[Guest Sonia Kapoor]

Here's a clarification from DOL on issuing of SAR's alongwith Form 5500 for Small Plans. Hope it is of help to you.

"Small plans must issue SARs every year now (added April 22, 2000). The DOL has finalized amendments to its regulations to incorporate the revisions to the Form 5500 series. One of the revisions is the elimination of Form 5500-C/R. Prior to the amendment, DOL Regulation section 2520.104b-10 prescribed an alternative method for satisfying the summary annual report (SAR) requirement for years in which a Form 5500-R was filed. Under the alternative method, the plan could provide the participants a copy of the Form 5500-R, or post a notice at the worksite which described each participant's right to obtain a copy of the Form 5500-R. This allowed a small-plan filer to limit preparation and furnishing of a separate SAR to every third year, when the Form 5500-C was filed. Since the revised forms eliminate Form 5500-C/R, this alternative method for complying with the SAR requirement no longer applies to reports filed for the 1999 plan year and subsequent plan years. Thus, small-plan filers now have an annual requirement to prepare a separate SAR and to furnish the SAR to the participants and beneficiaries".

[Guest Ray Williams]

My question still remains, " are there any participants or beneficiaries receiving payments after the Plan has terminated". Does the reference to "participants" mean at any time during the Plan Year which the SAR covers, or can we use the participant count on the last day of the Plan Year(0), as the participant count. Otherwise, to whom does the Plan Sponsor provide notice?

[Cathy from Chicago]

Ray, my opinion is that you do not need to prepare a SAR for a terminated plan for the simple reason, as you mention, there are no add'l assets. All participants know the plan is terminated by the fact they were notified of termination plus received their account balance. The reason for filing the 5500 is to simply let the DOL know....there are no more participants/beneficiaries.

[Guest mswpaid]

Take a look at this letter. To summarize, it seems to require an SAR in the year of plan termination.

[Guest meggie]

As long as there are no participants at the end of the plan year (all benefits have been distributed), there is no SAR to be distributed. Othewise, who would receive the SAR?