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Reporting Deferred Vested Pension Participants

If you administer an ERISA 203 employee benefit plan, you are required to file IRS Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits. The form provides information about plan participants who no longer work for the company and who have deferred vested benefits. It also covers instances where the benefits were transferred from another plan, paid out benefits, and corrections to previous filings. The IRS passes the information along to the Social Security Administration, which reports it to new filers when they apply.

Filing Requirements

Plan administrators subject to ERISA Section 203 vesting standards must file Form 8955-SSA, This doesn’t include annuity contracts or custodial accounts as long as they were issued before Jan. 1, 2009, the employee stopped contributing before that date, the terms can be enforced without employer involvement, and the participant is fully vested. If you sponsor a plan for a church, government agency or other exempt institution, filling the form is voluntary. If you are ending the plan, you must file the form when you file Form 5500. You have to file Form 8955-SSA by the end of the seventh month following the last day of the plan year, although extensions are possible.

The rules about participant reporting differ between single- and multiple-employer plans. For single-employer contributions, file the form for participants that separate during the plan year and are entitled to a deferred vested benefits. If more than one employer contributes, report entitled participants that have incurred two successive one-year breaks in service. In either case, omit participants who’ve received some or all of the benefit, have returned to service or have forfeited their benefits. However, report when plans stop paying before all benefits have been paid out. In cases of transferred plans, both the old and new administrators must fill out portions of 8955-SSA.

Filling out the Form

In Part I:

  • Plan year
  • Voluntary or mandatory filing
  • Amended filing, extended filing

In Part II:

  • Plan name, number and sponsor and trade name
  • Sponsor’s employer identification number and address
  • Care of, in case you want a third party to receive mail for the plan
  • Plan administrator’s name, address and EIN
  • Any change to the administrator’s name or EIN
  • Number of entitled participants who separated during the plan year or separated in the previous year but weren’t reported
  • Affirmation that the administrator provided an individual statement to each entitled participant
  • Signature of plan administrator

In Part III:

  • Plan name, plan number and sponsor’s EIN
  • Filing code:

o   A: participant not previously reported

o   B: modify previous information

o   C: transfer

o   D: participant no longer entitled to deferred benefits

  • For each participant:

o   Participant Social Security number, name, and whether or not the information is complete

o   Type of annuity

o   Benefit payment frequency

o   Amount of periodic payment

o   Account value

o   Previous plan EIN

Penalties

Failure to file can get expensive. The IRS assesses $1 per day per participant for delayed filings, up to $5,000. If you fail to notify the IRS about a change to the status of the plan, the penalty is $1 a day up to $1,000. Failure to send individual statements to participants before the filing deadline will cost you $50 each.

You can reduce the filing burden by buying Form 8955-SSA software or having a service bureau produce and file the forms for you. The IRS encourages you to file the form electronically.

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Erich J. Ruth

Erich J. Ruth provides technical support for National Software which is the parent company for 1099FIRE. 1099FIRE develops and markets a comprehensive range of products that enables any size of business or institution to effectively manage and comply with year-end filing requirements. 1099FIRE is an employee-owned company located in Phoenix, Arizona.

If you have any questions or comments about our software, feel free to contact us at any time.

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