January 17 Filing Deadline Approaches for Retirement Plan Sponsors
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Plan administrators are allowed to combine the 2009 and 2010 annual filings and report both plan years on one filing. |
Not all plan administrators are aware of the special filing date for reporting separated plan participants with deferred vested benefits for the 2009 and 2010 plan years. The date has been extended to the later of
- January 17, 2012, or
- the due date for the filing of the plan’s 2010 Form 5500.
Generally, the new filing requirement is due the same day as Form 5500 and related schedules. However, the submission date was extended to help ease the transition to the newly released
Form 8955-SSA: Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits (which replaces the old schedule SSA), and the electronic filing procedure. In addition, full compliance requires sponsors to provide each participant listed on the form with an individual statement of benefit.
“This new filing requirement for 2009 and 2010 is right around the corner,” says Darren Paumen, a benefit services manager with LarsonAllen. “While most third party service providers are aware of the new form and deadline, not all of them are preparing the new form. We want to ensure that plan sponsors are complying, including 403(b) plans that are subject to ERISA (Employee Retirement Income Security Act).”
Sponsors could be subject to penalties under Internal Revenue Code Section 6690 for failure to file a registration statement or failure to include all participants. The penalty is $1 per day for each participant not reported, multiplied by the number of days the reporting failure continues, up to a maximum of $5,000. Plan sponsors may also be subject to a $50 penalty per participant for failure to deliver the required individual statement to participants. Plan administrators should contact their service providers to ensure the required filing(s) are handled properly and timely.
Facts on filing
Plan sponsors have the option to file online or via a paper return. Keep in mind the
electronic filing system is down for repairs from December 16–January 4, and no extensions will be granted for the January 17, 2012 filing date, according to the IRS. During this time you can’t file online, but you can submit a paper return.
Plan administrators are allowed to combine the 2009 and 2010 annual filings and report both plan years on one filing. Generally the new form is due the same date as the Form 5500 and related schedules, but the special filing due date was established to help ease transition period for the new form. Additional filing information can be found on the IRS FAQ page.
Background leading to the change
There have been many changes in the past three years that led to the filing extension.
- Until 2009, Schedule SSA, was filed with the Form 5500 to account for terminated plan participants with a deferred vested benefit.
- Then in 2009 the Department of Labor implemented an electronic filing system called EFAST2, which required plan sponsors to transmit forms and schedules online.
- During the electronic filing transition period (2009 and 2010), Schedule SSA was eliminated to keep sensitive participant information contained in the schedule confidential. Meanwhile the IRS was creating a new secure form to report such information.
- In 2011, IRS released the new form: 8955-SSA, replacing the previous schedule.
- The new form utilizes a bar code system for processing the returns, and should be used for the transition years of 2009 and 2010.
- In June of 2011, the IRS also revised the Form 5558: Extension of Time to File Certain Employee Plan Returns to accommodate the new Form 8955-SSA. Form 5558 now includes a separate section for plan administrators to extend the Form 8955-SSA. The extension must be signed by a plan administrator, employer, plan sponsor, or any other individual or authorized representative for extending a Form 8955-SSA.
How we can help
We can help you understand and comply with the filing requirements for Form 8955-SSA.
Darren Paumen, Benefit Services Manager
dpaumen@larsonallen.com or 320-203-5830
View our benefit services principals.