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New Form 8955-SSA: Ensuring Compliance

June 16, 2011

Dina Ouellette, CPA
Tax Director
BlumShapiro

Background

Pension plans have used Schedule SSA of Form 5500 to report participants who separate from service with deferred vested benefits.  However, with the start of the mandated 5500 electronic filing requirement for annual reports with the 2009 plan year, that information could not be filed through the Department of Labor’s EFAST2 electronic filing system.  As a result, Schedule SSA has been eliminated.

Form 8955-SSA is the new IRS form that replaces Schedule SSA.  The 2009 form was just finalized this week.  Since there have been delays in releasing the new form, there will be a special due date for the filing of the 2009 form.  

Special Filing Due Dates for the 2009 Plan Year

In general, the SSA information is due by the last day of the seventh month following the end of the plan year.   Special rules apply for the 2009 and 2010 plan years.  In order to provide plan administrators with additional time to complete and file the new Form 8955-SSA, information for 2009 and 2010 plan years is due the LATER of the filing due date (under the general rules for the 2010 plan year) or January 17, 2012.

An extension of time may be requested to extend the filing due date under the general rules.  Form 5558 is used to apply for an extension of time.  There is a revised Form 5558 which is still in draft form.  The draft extension requires a separate request and signature for extension of Form 8955-SSA.  The extended due date is the same as the extended due date for the Form 5500 (not later than the 15th day of the third month after the normal due date).

No extensions will be granted for the January 17, 2012 due date. 

Form 8955-SSA is to be sent to the Department of the Treasury, Internal Revenue Service, Ogden, Utah 84201-0024.  Filing electronically is voluntary.  Form 8955-SSA is NOT open to public inspection.  Do not attach Form 8955-SSA to a Form 5500 (which is open to public inspection).               

What is Reported

Form 8955-SSA is used to report participants when they separate from service and are entitled to a deferred vested benefit under the plan.  Participants should be reported no later than the plan year following the plan year in which the separation occurred. 

Example:  John Smith separates from XYZ Company with a deferred vested benefit in the company’s 401(k) plan on May 1, 2010.  The plan uses a calendar year, and John has not received any portion of his benefit as of 12/31/2011.  John could be reported on either the 2010 or 2011 Form 8955-SSA.

If the plan sponsor reports John Smith on the 2010 Form 8955-SSA, they are using the current year method.  If the plan sponsor reports John Smith on the 2011 Form 8955-SSA, they are using the lag year method.   The majority of plan sponsors use the lag year method since it usually reduces the number of participants to report each year.

The information reported on Form 8955-SSA is given to the Social Security Administration (SSA).  The SSA provides the reported information to separated participants when they file for social security benefits.

The information needed to report will come from the recordkeeper or actuary of the plan. 

8955-SSA for 403(b) Plans

2009 was the first time 403(b) plans were subject to the full annual reporting requirements (Form 5500).

All participants with deferred vested benefits separating from service in plan years PRIOR to 2009 will be reported in the 2009 plan year.  Participants with deferred vested benefits separating from service during the 2009 plan year will be reported in the 2010 plan year.

Combining 2009 and 2010 Reporting

Plan administrators may use a separate 2009 Form 8955-SSA to report information for the 2010 plan year or combine the information for the 2009 and 2010 plan years on a single 2009 Form 8955-SSA.

 Additional Information

The 2009  form and filing instructions can be found on the IRS website www.irs.gov/retirement/index.html  and enter “8955-SSA” in the search box. 

 

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