Form 5500 - Terminating Solo 401(k)

[Vlad401k]

We have a plan where only 1 person (100% owner) was a participant. The plan's assets never exceeded $250k, so no Form 5500 has been filed in the past. The plan terminated on 12/31/2023 and the owner took a full distribution in April of 2024. We'll file one Final Form 5500-EZ - for 2024.

 

I have a couple questions:

 

1) Since the owner technically has a termination date of 12/31/2023 (plan's termination date), is 8955-SSA form required for 2023? Is the 8955-SSA form required for 2024?

2) The SAR is not required for any year (including 2024) because this is a Solo 401(k), correct?

 

Thanks!

[Lou S.]

I have never filed an 8955-SSA for an owner only plan. Hopefully it's not required.

SAR is not required for EZ.

 

[Paul I]

There is no need to file a Form 8955-SSA for this participant.  The instructions to the Form 8955-SSA say:

When To Report a Separated Participant
In general, for a plan to which only one employer contributes,
a participant must be reported on Form 8955-SSA if:
1. The participant separates from service covered by the
plan in a plan year, and
2. The participant is entitled to a deferred vested benefit
under the plan.
In general, information on the deferred vested retirement
benefit of a plan participant must be filed no later than on the
Form 8955-SSA filed for the plan year following the plan year
in which the participant separates from service covered by
the plan. However, you can report a deferred vested
participant on the Form 8955-SSA filed for the plan year in
which the participant separates from service under the plan if
you want to report earlier.

I expect it is possible for a Form 8955-SSA to be required if the owner stopped working and kept the plan open with the owner's benefit as a deferred vested benefit.

Has anyone ever encountered these circumstances and filed the SSA?

[Bill Presson]

Owner only plans aren’t subject to ERISA Title I so 8955-SSA isn’t applicable. 

[Paul I]

Thanks Bill.  I should have noted that the Form 8955-SSA instructions do say in the Who Must File section:
"Plan administrators of plans subject to the vesting standards of section 203 of ERISA must file Form 8955-SSA."

That section ends with the comment:

"Sponsors and administrators of government, church, and other plans that are not subject to the vesting standards of section 203 of ERISA (including plans that cover only owners and their spouses or cover only partners and their spouses) may elect to file Form 8955-SSA voluntarily. See the instructions for Part I, line A."

The instructions for Part I, line  start with:

"Line A. Check this box if you are electing to file this form voluntarily."
 

To rephrase the question, has anyone who is not required to file a Form 8955-SSA ever voluntarily filed one?

[ratherbereading]

14 hours ago, Paul I said:

Thanks Bill.  I should have noted that the Form 8955-SSA instructions do say in the Who Must File section:
"Plan administrators of plans subject to the vesting standards of section 203 of ERISA must file Form 8955-SSA."

That section ends with the comment:

"Sponsors and administrators of government, church, and other plans that are not subject to the vesting standards of section 203 of ERISA (including plans that cover only owners and their spouses or cover only partners and their spouses) may elect to file Form 8955-SSA voluntarily. See the instructions for Part I, line A."

The instructions for Part I, line  start with:

"Line A. Check this box if you are electing to file this form voluntarily."
 

To rephrase the question, has anyone who is not required to file a Form 8955-SSA ever voluntarily filed one?

I have not - if you're not required to why do extra unnecessary work?