IRS Releases FAQs on Notice to Terminated Participants with Deferred Vested Benefits Reported on the New Form 8955-SSA

IRS Releases FAQs on Notice to Terminated Participants with Deferred Vested Benefits Reported on the New Form 8955-SSA

The Internal Revenue Service has released a new set of frequently asked questions (FAQs) on the requirement to provide notice to participants in pension, 401(k), 403(b), and other retirement plans who have terminated employment with the plan sponsor, but who have vested plan benefits that are payable in a future year. The "terminated vested" participant notice is associated with the new Form 8955-SSA, which the IRS has announced will replace the old Schedule SSA for 2009 and later plan years.

Note that the deadline for filing the 2009 and 2010 Forms 8955-SSA and furnishing the related notices to terminated vested participants is January 17, 2012, for calendar year plans or, if later, the last day of the seventh month following the plan year, plus extensions.

The FAQs indicate that the notice requirement will be satisfied if the terminated vested participants listed on the Form 8955-SSA have been provided statements or other documentation that include the following information:

  • The name of the plan
  • The name and address of the plan administrator
  • The name of the participant
  • The nature, amount, and form of the deferred vested benefit to which such participant is entitled

In addition, the FAQs provide that the plan administrator does not have to include certain information that must be reported on the Form 8955-SSA, including:

  • Participant's Social Security number
  • The codes on page 2 of the Form 8955-SSA used to identify previously reported participants
  • Information regarding any benefitsthat are nonforfeitable if the participant dies before a certain date

Plan administrators should review the materials previously distributed to terminated vested participants for the 2009 and 2010 plan years to confirm whether a separate notice should be provided to the affected participants by the January 17, 2012, deadline for calendar year plans.

If you have any questions about the terminated vested participant notice requirements or your organization's compliance with the new Form 8955-SSA, please contact Brian M. Pinheiro at 215.864.8511 or pinheiro@ballardspahr.com, or Josh Bobrin at 215.864.8409 or bobrinj@ballardspahr.com.

Copyright © 2011 by Ballard Spahr LLP  (No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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