New Form 8955-SSA
Starting with the 2009 plan year, plan administrators are required to provide information on separated participants with deferred vested benefits on the new Internal Revenue Service (IRS) Form 8955-SSA (the Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits). Section 6057(a) of the Internal Revenue Code requires plan administrators of retirement plans subject to the vesting standards under the Employee Retirement Income Security Act of 1974 to report information regarding participants who separated from service covered by the plan during the plan year and are entitled to a deferred vested benefit that has not commenced, as well as participants previously reported whose benefits under the plan have changed. The new IRS Form 8955-SSA replaces the Schedule SSA that was previously required as part of a plan’s Form 5500 annual report.
Except for the 2009 and 2010 plan years, Form 8955-SSA must generally be filed by the last day of the seventh month after the plan year ends. For calendar year plans, the general Form 8955-SSA deadline is July 31 of the following calendar year. An automatic extension of time to file Form 8955-SSA until the due date of the employer’s federal income tax return applies if the plan year and the employer’s tax year are the same, and the employer has been granted an extension of time to file its federal income tax return after the normal due date for filing Form 8955-SSA. Alternatively, the general deadline for filing Form 8955-SSA may be extended for up to two and a half months by filing IRS Form 5558 by the general Form 8955-SSA deadline. For calendar year plans, filing Form 5558 by July 31 will extend the deadline to October 15.
Due to the delayed release of the new Forms 8955-SSA for 2009 and 2010, the IRS extended the general filing deadline for the 2009 and 2010 plan years until the later of January 17, 2012, or the due date that generally applies for filing Form 8955-SSA for the 2010 plan year. In the case of a 2009 plan year or a calendar 2010 plan year, the Form 8955-SSA is required to be filed by January 17, 2012. The January 17, 2012, due date can not be extended by filing Form 5558 or by automatic extension. Note that a Schedule SSA filed for plan year 2009 and/or plan year 2010 before April 20, 2011, is treated as satisfying the reporting requirements.
How to File
Plan administrators may file separate Forms 8955-SSA for the 2009 and 2010 plan years, or combine data for both plan years into a single Form 8955-SSA. Form 8955-SSA may be filed with the IRS by paper or electronically. The Form 8955-SSA should not be filed with the U.S. Department of Labor’s filing system (EFAST2).
Individual Notice Required
Plan administrators must furnish each affected participant with an individual statement describing the information that will be reported on the Form 8955-SSA and certify on the Form 8955-SSA that the plan has met this individual notice requirement. A plan administrator can satisfy this requirement by using other notices, such as benefit statements or distribution forms, so long as those other notices include the name of the plan, the name and address of the plan administrator, the name of the participant, and the nature, amount and form of the deferred vested benefit to which such participant is entitled. The plan administrator’s notice to the plan participant does not need to include the participant’s social security number, the codes on page 2 of the Form 8955-SSA used to identify previously reported participants, or any information regarding any benefits which are forfeitable if the participant dies before a certain date. Thus, for purposes of completing Form 8955-SSA, a separate statement designed specifically to satisfy this requirement is not required.
Failure to file a timely Form 8955-SSA may result in a penalty to the plan administrator of $1 per participant not reported per day, up to a maximum of $5,000. Failure to provide the individual statements may result in a penalty to the plan administrator of $50 for each failure to furnish the statement.
For more information about the IRS Form 8955-SSA, please contact your regular McDermott Will & Emery lawyer or an author.