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lori

Terminating A Erisa 403(b) Plan And 5500 Reporting Requirements

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Hi

First post here.

 

A company is going out of business in June 2010. They have about 50 individually owned contracts in the plan. How on earth are they to report distributions on Schedule I for 2009 and then again for 2010 when the plan is terminated by resolution?

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5500 preparation is not my specialty but the distributions as a result of the Plan Termination should be reported for the plan year the distributions are made. Therefore, if the distributions are made in 2010, they should be reported on the on the 5500 Schedule I for 2010 only (not the 2009 Schedule I).

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I understand that. However, with new and extensive 5500 reporting requirements for ERISA 403(b) plans eg Schedule H or I, you are required to report distributions to terminated participants effective for 2009 plan years. If a participant owns the contract as opposed to the plan or plan sponsor, how does one report a distribution paid. In the past you did not have to report distributions, how is it possible to report them now when the participant owns the contract?

 

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They need to report the aggregate participant distributions each year on the Schedule I – line 2(e) "Benefits paid (including direct rollovers)". The fact that they are individually owned contracts vs group contract or custodial accounts has no impact on the reporting requirements. The 403(b) provider should have a group or plan number associated with each individual 403(b) contracts. The company may need to request a group or plan activity report at the end of the year from their 403(b) provider to prepare their 5500. Many 403(b) providers, including TIAA-CREF, had to update their plan sponsor reporting to meet this new challenge. The bigger challenge is when there are multiple 403(b) vendors involved.

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