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Form 5500 and Conversion From Single Employer to Multiple Employer Plan


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Posted

A 401(k) Plan is a single employer plan and filed Form 5500's as such. Mid-year 2019 the plan selects a multiple employer plan provider and converts to become a participant in a multiple employer plan. The Lead employer that sponsors the multiple employer plan files a full year 2019 Form 5500, and this 401(k) plan is listed as a participating plan. While the IRS received a single plan Form 5500 from this 401(k) Plan in 2018 they are asking why no 5500 was filed for 2019. Thus, we are sending them the multiple employer plan Form 5500 that was filed for 2019. Is this enough? Or does the plan need to file a short year 5500 for 2019 for the months it existed as a single employer plan and use the DOL DFVCP to correct this apparent filing error?   

Posted

If the single employer plan sponsor maintained its own plan for any part of 2019, I would advise to file the late 2019 5500 under DFVCP for the final stub year.   Also, the language "converted" to a new plan is not clear.  What happened to the prior plan?  Terminated?   Merged?  A "final" 2019 Form 5500 would be required to shut off the single employer plan 5500's.  Otherwise the DOL will keep looking for them year after year until a final return is filed.

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