Form 8955-SSA Update: Participant Statements

Posting by David Miller
P: 301.272.6031 | E: miller@bbcpa.com

New reporting requirements for IRS Form 8955-SSA are now in place for employee benefit plans. While December 31 year-end plan filings for the 2009 and 2010 plan years were due on January 17, 2012, there is still time to submit non-December 31 year-end plan filings, which are due when filing the 2010 Form 5500, including extensions.

The IRS recently released Announcement 2011-21 with additional clarifications about these Form changes. Here is an overview of the new reporting requirements:

Background
In 2011, the IRS released Form 8955-SSA, replacing Form 5500 Schedule SSA. This form is used to report participants who have separated from a retirement plan with a deferred vested balance. The government uses this information to inform or remind individuals who apply for Social Security benefits that they have earned benefits from a retirement plan during their working career.

Individual Statements to Participants
The new Form 8955-SSA contains the following question regarding participant statements: “Did the plan administrator provide an individual statement to each participant required to receive a statement?” The inclusion of this question has raised some concerns that the IRS intends to begin enforcement of a long-standing requirement that plan sponsors mail statements to the participants reported on Form 8955-SSA. Penalties do apply to plans that fail to send this statement.

When sending participant statements, the information reported should match the information reported on the Form, including: the name of the plan, the name of the participant, the vested benefit amount, how often the payment is made (lump sum, monthly, etc.), and a notice (if applicable) indicating which benefits are forfeitable if the participant dies prior to a certain date. Participant statements should be sent prior to filing the Form 8955-SSA with the IRS.

Filing Deadlines
The IRS did not release the new Form 8955-SSA in time for Plans to report the information for 2009, so the IRS extended the 2009 plan year reporting to coincide with reporting for plan year 2010. As mentioned above, December 31 year-end plan filings for the 2009 and 2010 plan years were due on January 17, 2012. Non-December 31 year-end Plan filings are due when filing the 2010 Form 5500, including extensions. The filings for 2011 plan years will be due the same time as the 2011 Form 5500, including extensions.

For additional information on Form 8955-SSA, visit the IRS website.

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