Terminating a 401k Plan - final 5500 question

[James Shen]

My client (company A) acquired a company (company B) in 2021.  2022 was the final year of B's 401(k).  Since it was a SH plan with a generous plan design, ERISA counsel told us we could not merge the plan until end of year, 2022.  Totally fine.  Blackout started for participants on 12/28/2022 and the final asset transfer happened on 01/05/2023.  

 

Are we able to file the 2022 5500 as the final 5500 and mark that all assets have been transferred?

[CuseFan]

If the legal documentation said they were merged 12/31, then for that brief time in 2023 you had two trusts but one merged plan, I think you're good.

[James Shen]

@CuseFan Thank you!  

 

The TPA for B's 401(k) Plan said the same thing.  My client wanted my input, but as a financial advisor, this is a little out of my comfort zone so I thought I'd ask this group.  I agree with your assessment. 

[Bri]

Out of curiosity, did you show the assets and liabilities netting to zero on the financial summary section of the 5500?  (With the amount also listed on the Transfers of Assets section for 2022?)

[James Shen]

@Bri  I have not seen the final 5500 so I can't say for sure.  But great question and I will ask to see it to confirm.

[CuseFan]

Yeah, I was a little curious on the timing of the question given the 5500 filing deadline had passed (unless not a calendar year plan or disaster area extension) and someone already answered it and filed accordingly - thinking maybe you/they were looking for reassurance on what was already done. If 2022 5500 does not show zero ending assets (and participants) then there is a 2023 final filing due and without extension would have been due 8/31, before an extended 2022 return, talk about a conundrum!