Form 5500 reporting and uncashed checks

Hello.

The alliance that holds the assets for a client of ours just added funds to the plan due to uncashed checks from 2012.  Yes, I said 2012.  The amount totals $195 for 3 participants.

How are these funds reported on the 2017 Form 5500-SF if the client has chosen not the restore the funds to each participants' account with the understanding that if the terminated participant comes looking, they will need to provide the funds?

Do the participants need to be reported again on a Form 8955-SSA that they still have benefits due, since they were reported as having been paid their vested balance in 2012?

Thanks for any guidance you can provide.

the ssa instructions are

When Not To Report a Participant

A participant who has not been previously reported is not required to be reported on Form 8955-SSA if, before the date the Form 8955-SSA is required to be filed (including any extension of time for filing), the participant:

1.Is paid some or all of the deferred vested retirement benefit,

2.Returns to service covered by the plan and/or accrues additional retirement benefits under the plan, or

3.Forfeits all the deferred vested retirement benefit.

...................

since the amounts are less < whatever, I would see about rolling the amounts into an IRA. if done before the filing date for the 2017 SSA it looks like rule 1 applies.

or if you are going to simply forfeit then rule 3 applies

in either case for 2017 it looks like you could ignore them depending on how you handle it, even at this point in time in 2018.

19 hours ago, Tom Poje said:

A participant who has not been previously reported...

But these people were previously reported.

For $195 I would figure out a way to make this go away, not report on 5500 or 8955.

hadn't thought about it, but while true, they were also reported later as a D and therefore that should have removed them from the list, so in a sense, since the system no longer knows about them they haven't been reported. the whole idea, at least the way I read the instructions is

"Look, if you know the person has no balance before the form is due, don't bother reporting them as an A, and then have to take them off as a D the following year" - one of the times I will give them credit for thinking logically.

Can you force distributions and have the accounts eaten up as processing fees?

So would the answers here be different if the dollar amount were $19,500?  The fact that the money was returned to the plan, IMHO is a good thing.

That being said one must consider that the money can be considered forfeited and reported as other income.

Records should be kept of which participants had money returned, how much and when.  There should be a plan procedure for making those participants whole with income if/when they show up. 

I don't think that considering a check that was never cashed is paying out the benefits.  However, the plan is between a rock and a hard place because if you add them to the 8955SSA as an A code, you have to provide a statement to the participant as to what was reported on the 8955SSA or risk a penalty.  Very Difficult if you don't know how to contact them.

This is a situation where it would be useful to be able to send them to the PBGC as missing participants. But you can't do that because the plan is ongoing.

You can't just make it go away.  There needs to be a plan with the participants' best interest in mind.

BPAS is one of several who has an auto-rollover service you may want to utilize after trying to find these people as missing participants---see below

The BPAS Advantage

BPAS AutoRollovers is a no-hassle IRA for former participants who are subject to a mandatory distribution. A no-cost, streamlined account set-up process saves time and money. Plus the entire distribution process is fully automated for plans on the BPAS platform.