Form 5500 - Schedule D Reporting

[FishOn]

 

We have a plan that has moved from a group variable annuity to a mutual fund based investment arrangement.  Do I need to file a schedule D if the plan only has mutual funds? As from our knowledge it does not meet the 4 required entities to file a schedule D.

[Paul I]

If the plan invested in mutual funds at all times throughout the plan year, then you do not need a Schedule D.  If the plan invested at any time during the plan year in any of the investment types CCT, PSA, MTIA, 103-12 IE, then you will need to a Schedule D for that plan year.

[Peter Gulia]

Beyond Paul I’s caution about whether there was a direct-filing entity investment any time in the reported-on year, consider also:

Some people (less detail-oriented than FishOn) use the lingo “mutual fund” without distinguishing between SEC-registered shares of a company or trust registered with the SEC under the Investment Company Act of 1940

and an investment fund of some other kind, including a bank’s or trust company’s collective investment trust fund or another arrangement that might be a direct-filing entity.

A plan’s administrator should distinguish, for each investment fund, exactly which kind of fund the plan invests in. Not all reports show the classifications.

[Cherry Park Advisory]

I’d add one other consideration: if the plan transitioned from a group annuity to mutual funds during the plan year, it’s worth confirming whether any assets were invested in a direct filing entity (CCT/CIT, PSA, MTIA, or 103-12 IE) at any point before the conversion. Schedule D is based on investments held during the reporting year, not just at year-end. If the plan was invested solely in registered mutual funds for the entire year, then Schedule D generally would not be required.

[Cherry Park Advisory]

I’d add one other consideration: if the plan transitioned from a group annuity to mutual funds during the plan year, it’s worth confirming whether any assets were invested in a direct filing entity (CCT/CIT, PSA, MTIA, or 103-12 IE) at any point before the conversion. Schedule D is based on investments held during the reporting year, not just at year-end. If the plan was invested solely in registered mutual funds for the entire year, then Schedule D generally would not be required.