5500 and document question on spinoff restatement

[mattmc82]

Plan X (PN 001) was effective 1/1/2012 and was made up of two entities (A and B) in a controlled group.

During 2020, Company B is sold to unrelated buyer. Will spinoff / restate as of 12/31/2020 as Plan Y. 

Will the plan number for Plan Y have to be 002 or is 001 okay?

Original effective date is 1/1/12, so for the "new" spun off plan, this is not considered a "first return/report", correct?

Would Line 4 (of the 5500-SF) be completed with the info of Plan X on Plan Y's 2020 return?

[Larry Starr]

1 hour ago, mattmc82 said:

Plan X (PN 001) was effective 1/1/2012 and was made up of two entities (A and B) in a controlled group.

During 2020, Company B is sold to unrelated buyer. Will spinoff / restate as of 12/31/2020 as Plan Y. 

Will the plan number for Plan Y have to be 002 or is 001 okay?

Original effective date is 1/1/12, so for the "new" spun off plan, this is not considered a "first return/report", correct?

Would Line 4 (of the 5500-SF) be completed with the info of Plan X on Plan Y's 2020 return?

You say you will spinoff/restate, but I don't think that is right.  You will spinoff and ESTABLISH a new plan, not restate it; Plan X continues in existence with no need for restatement due to the spinoff (obviously, the appropriate spinoff language needs to be adopted).

If the plan sponsor of the plan was A and that tax ID number was used to identify the plan 001, then I would set up the new plan for B as 001 (assuming that employer with that tax ID never had a plan identified with its own EIN) and it would be the first 5500 for that plan.  Line 4 would be left blank.

[mattmc82]

2 hours ago, Larry Starr said:

You say you will spinoff/restate, but I don't think that is right.  You will spinoff and ESTABLISH a new plan, not restate it; Plan X continues in existence with no need for restatement due to the spinoff (obviously, the appropriate spinoff language needs to be adopted).

If the plan sponsor of the plan was A and that tax ID number was used to identify the plan 001, then I would set up the new plan for B as 001 (assuming that employer with that tax ID never had a plan identified with its own EIN) and it would be the first 5500 for that plan.  Line 4 would be left blank.

Thanks Larry. So you are saying you would have effective date 1/1/12 AND “first return/report” marked, correct? 

[Mike Preston]

The effective date should be the date of the spinoff, not 12/31/2020 unless that is the date of the spinoff he wrote redundantly. :-)

[Larry Starr]

13 hours ago, Mike Preston said:

The effective date should be the date of the spinoff, not 12/31/2020 unless that is the date of the spinoff he wrote redundantly. ?

I'm not sure I agree (nice way to say I don't agree ?).  If the spinoff occurs, say, Feb 1 but you want the new plan to be effective for the entire year (beginning 1/1 of that year), I think I would make it effective 1/1.  The spinoff can "transfer" even after the new plan is set up; I don't see it as having to be coincident.  I certainly would not make it effective 1/1/12 (or was that a typo?).

[Luke Bailey]

On ‎7‎/‎17‎/‎2020 at 3:00 PM, Larry Starr said:

You will spinoff and ESTABLISH a new plan, not restate it;

I would rephrase, but same thought: Company B establishes a new plan, and assets of Plan X are spun off into it. Then the questions' answers are clear. And if it is individually designed or there is any other reason for wanting a DL  you can submit as new plan.