The IRS issued Announcement 2011-21 which designated the Form 8955-SSA as the form to use for reporting separated participants with deferred vested benefits. The IRS has released a draft of Form 8955-SSA as well as posted FAQs on their website.
Previously, Schedule SSA was used to report separated participants with deferred vested benefits until the DOL mandated electronic filing of the Form 5500. The DOL electronic mandate did not apply to the Schedule SSA (an IRS form) and it was removed from the Form 5500 filings beginning with the 2009 plan year.
The Form 8955-SSA must be filed by the last day of the seventh month following the end of the plan year; an extension can be obtained by filing Form 5558. The Form 5558 is being revised to enable filers to request the extension for the Form 8955-SSA.
The Form 8955-SSA is a stand-alone form to be filed with the IRS and should be used for the 2009 plan year filing. A draft is available and the final version is expected to be available in time for August 1, 2011 due date. In addition, the Announcement indicates that the 2010 Form 8955-SSA is being developed and expected later this year. Plan Sponsors may file 2009 and 2010 plan year information on the 2009 Form 8955-SSA.
The Announcement indicates that the IRS has developed a voluntary electronic filing system for filing Form 8955-SSA which is ready to accept filings when the form becomes available for filing.
The Announcement also indicates that plan administrators who submitted Schedule SSA to the IRS for the 2009 or 2010 plan year before April 20, 2011 will be considered as satisfying the reporting requirement.
As noted above, the IRS has a webpage with 17 FAQs; following are some of the answers: :
- IRS apologizes for the delay in getting information to third-party service providers. Information for third-party service providers is now or soon will be available on the IRS website. This information includes: the Form 8955-SSA and instructions; specifications for filing electronically through the IRS’ FIRE system (Publication 4810), and Social Security Administration standards for generating and testing 2D barcodes on facsimile forms.
- You may prepare one Form 8955-SSA encompassing both 2009 and 2010 reportable employees. In that case, the 2010 reportable employees are treated as reported in 2009.
- Filers of Form 8955-SSA are not required to have a PTIN at this time.
- Form 8955-SSA can be submitted to the IRS in paper by or electronically by using third-party software and the IRS’ Filing Information Returns Electronically (FIRE) system.
- Only people actually transmitting electronic forms to FIRE will need credentials, so if a third-party service provider is used, it’s unlikely that plan sponsors and plan administrators will need credentials.
- If the plan administrator and the plan sponsor are the same person, only the signature as plan administrator needs to be included on the form.
- Similar to the rule with the Schedule SSA, the individual statement must be furnished to the separated participant no later than the due date for filing the Form 8955-SSA.
Bottom line for Plan Sponsors:
- If you are required to file the Form 8955-SSA, it is a separate filing to the IRS in addition to the Form 5500 filing to the DOL.
- If you file for an extension for your Form 5500, make sure you check the box for the Form 8955-SSA as well (assuming there will be a box and a separate Form 5558 filing will not be necessary).
- Check with your Form 5500 software provider regarding the availability to file electronically.
You may want to check our new blog periodically for quick updates on compliance issues.
Note: all links are active as of the date of issuance of this ErisaALERT.
Disclaimer: This material is for the sole purpose of providing general information and does not under any circumstances constitute legal advice and should not be used as a substitute for legal advice. You should seek the advice of counsel when applying the requirements to your plan. For more information on this ErisaALERT contact us by phone at 610-524-5351 and ask for Mary Andersen or 973-994-7539 and ask for Theresa Borzelli.