Contribution for Schedule B

[richard]

Several years ago, the IRS (or Joint Board, I forgot who) pronounced that an actuary must have verification that a contribution was actually made in order to sign a Schedule B reflecting that contribution. That essentially prohibited the then popular "to be made before September 15" on Schedule B's, and often leads to timing difficulties approaching the filing deadline.

First of all, who made the pronouncement, and what is the cite?

Second of all, which of the following would, by itself, be considered as acceptable verification?

1. Copy of cancelled check

2. Copy of investment or bank statement showing the posting of the contribution.

3. Signed statement by the plan sponsor stating that "a contribution of $X was made on ________.

4. Signed statement by the plan sponsor stating that "a contribution of $x will be made on _____.

5. Oral statement by the plan sponsor stating that "a contribution of $X was made on ______.

6. Oral statement by the plan sponsor stating that "

a contribution of $X will be made on ____.

7-10. Items 3-6 provided by the plan sponsor's accountant.

11-14. Items 3-6 provided by the plan sponsor's investment advisor/stock broker.

I feel comfortable with accepting #1, and not accepting any of the oral statements (by either the plan sponsor, the accountant, or the investment advisor/stock broker.

I'm also not comfortable with any of the signed statements by the accountant or investment advisor/stock broker.

What is everyone out there comfortable with?

Third of all, does anyone know whether the Joint Board or IRS disciplined any actuary for failure to comply with this pronouncement?

[david rigby]

Instructions to the Schedule B, Line 3 , include this sentence: "Show only contributions actually made to the plan by the date Schedule B is signed." I have copies of the instructions back to 1993, and all have the same sentence.

I would accept as proper documentation items 1, 2, or 3. Item 4 is not acceptable. Written documentation might also be acceptable from another source, such as auditor, but that seems less likely.

To me, the bottom line is that the documentation should be written (and NO! the new law on electronic signatures will not change my opinion on this). BTW, I have never heard of a client that had a problem with this.

The 1999 Form 5500 and instructions are here:

http://www.dol.gov/dol/pwba/public/pubs/fo...rms/fm99inx.htm

[Edited by pax on 08-21-2000 at 09:33 AM]