Terminated Plan - final 5500

Wondering if others have run into this situation...have a small 401(k) Plan that terminated.   Checks were issued to all participants in 2021.   As of 12/31/2021, several people did not cash there checks, so assets remain in the Plan.   The Trust therefore does have assets remaining as of 12/31/21.  Thoughts on whether 2021 should be the final Form 5500, or doing an additional 5500 for 2022.

Still have money in the trust so you have to file for 2022. In the future, I recommend using cashiers checks or a pay service (like Penchecks or Millennium Trust, etc)

On the bright side, I'd think that final 5500 should show 0 participants even at BOY, and with BOY assets/liabilities netting to zero, while EOY assets/liabilities being actual zeroes.

1 hour ago, Bri said:

On the bright side, I'd think that final 5500 should show 0 participants even at BOY

Why? If there are assets at BOY there should be a participant (or several) at BOY, no?

I think we've talked about this before and apparently I'm a cowboy for saying that you can accrue the distributions and show $0 assets at end of year.

2 hours ago, RatherBeGolfing said:

If there are assets at BOY there should be a participant (or several) at BOY, no?

How about a DB plan that terminated, paid everyone out, but had excess assets that weren't sent to a transfer plan until early the next year?  Actual situation; in this case I am uncomfortable accruing that transfer (it was not initiated until after EOY).  I'm not sure if the software/IRS computers will accept 0 participants at BOY.

If they're getting a 2021 1099-R for the as-yet uncashed check I wouldn't consider to count them as 1/1/22 participants. 

My innate sense of consistency, more than anything else.

3 minutes ago, Bird said:

I think we've talked about this before and apparently I'm a cowboy for saying that you can accrue the distributions and show $0 assets at end of year.

I don't necessarily disagree, I think you can do that with an expense as well.  In that situation though, Wouldn't you show $0 net assets and 0 participants at EOY 2021?

The issue I'm having here is reporting no participants at EOY2021/BOY2022 while also reporting assets.

20 minutes ago, Bri said:

If they're getting a 2021 1099-R for the as-yet uncashed check I wouldn't consider to count them as 1/1/22 participants. 

If they get a 2021 1099-R, how do you report the same assets as still part of the trust BOY2022?  I assume the reasoning for the 2021 1099-R is constructive receipt, but in that case I think you need to accrue the distribution in 2021.  Otherwise you are reporting participants based on accrual and assets based on cash on the 5500, while also reporting assets based on accrual on the 1099-R.  

I think if you issue the 1099-R for 2021 and show the uncashed check as corresponding asset/liability on the BOY 2022, then the participant no longer is part of the 2022 count.  If you're not showing the assets netting to zero, then the person's still a participant and should get his 1099 for 2022 instead of 2021.  I suppose.

18 hours ago, RatherBeGolfing said:

I don't necessarily disagree, I think you can do that with an expense as well.  In that situation though, Wouldn't you show $0 net assets and 0 participants at EOY 2021?

yes