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Posted

If a plan transfers out of a MEP and into a single employer plan there would be a blackout notice provided to participants upon the beginning of administrative activities to transfer moneys out of the MEP. But when preparing the first year 5500 for the newly birthed plan does the single employer 5500 need to state that the plan went through a blackout period because moneys were being transferred from the prior MEP? I can understand indicating a blackout on say a record-keeper transfer within the same single employer plan, or even the MEP suggesting a blackout occurred when money left its plan, but I'm on the fence about the newly created plan. Thoughts?

Posted

Purplemandinga, the spun off single employer plan is a successor, so really same "plan" in a sense. You did do the blackout notice, and there is no downside to overreporting, so why not check 4m "yes?"

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

Posted

A blackout notice was sent but I suppose the "yes" to a blackout on the 5500 issue wasn't the biggest issue.

Its whether to include late remittances on the 5500 that occurred during the "blackout" but in the "new" plan. In the single employer plan, participants had access to change investments and request distributions even during the time period when money was transferred from the prior plan. There just happened to be late remittances during this time frame that one couldn't really blame on the blackout.

I took the conservative route and stated there was no blackout in the successor plan and included the late remittances that, had there been simply a record keeper change, we wouldn't have reported. but wanted to know if I was being overly cautious. 

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