Schedule R participants with only receivables

[Pat Crum]

In completing Schedule R, are participants who have taken a distribution of their total invested account balance reported if they still have a receivable at the end of the year?  That is, if the participant's account balance is only a receivable are they considered fully paid out?

[Paul I]

I take it you are asking about responding Schedule R, Part I, Line 3 - Number of participants (living or deceased) whose benefits were distributed in a single sum, during the plan year.

The instructions say: 

Line 3. Enter the number of living or deceased participants whose benefits under the plan were distributed during the plan year in the form of a single-sum distribution. For this purpose, a distribution of a participant’s benefits will not fail to be a single-sum distribution merely because, after the date of the distribution, the plan makes a supplemental distribution as a result of earnings or other adjustments made after the date of the single-sum distribution.

Note that the language does not limit the time period to the plan year being reported for when the supplemental distribution is made .  Based on the instructions, the short answer is Yes.

If you like to pursue a nuanced rationalizations and get to a No response, then - particularly if the plan uses full accrual accounting for its financials - the argument would be the distribution was not a single-sum distribution of "benefits under the plan".  Then, to be consistent, you would include these individuals in the end of year count on Form 5500 Part II, Line 6(g)(2) as well as on any other relevant lines in Part II, Line 6.

I am not aware of any edit criteria for this line item.

I do have a bias towards keeping it simple.