Update: On January 11, 2012 the IRS released a new FAQ on participant statements related to the form 8955-SSA. This FAQ helps assure plan administrators that annual benefit statements typically already sent out by plans should meet the requirements for the Form 8955-SSA statements.
6/30/2011
The IRS recently released the 2009 form 8955-SSA. Form 8955-SSA replaces Schedule SSA and is used to report separated participants with deferred vested benefits. The IRS delayed form 8955-SSA/Schedule SSA filing deadlines once electronic filing of 5500 forms became required. The form cannot be filed electronically under current DOL electronic filing procedures because the form discloses participant social security numbers and other information that cannot be made available to the public (as regular 5500 filings are). The IRS has created a separate electronic filing process specifically for form 8955-SSA through the IRS FIRE site. Form 8955-SSA can also be submitted on paper.
The new 2009 form includes a new question regarding participant statements (line 8: "Did the plan administrator provide an individual statement to each participant required to receive a statement"). The existence of this new question raises the concern that the IRS may be interested in enforcing a long existing requirement for plan sponsors to mail statements to participants for whom it is required to report on Form 8955-SSA. Penalties apply for plans that fail to send out statements.
This article will discuss the participant statements in more detail. The article will also briefly review a number of Form 8955-SSA issues/FAQs: filing deadlines, extensions, paper filing, the new e-filing option through the IRS (or ftwilliam.com) and 2010 plan year reporting. Also see the end of the article for some upcoming 8955 webinars and for a recording of our recent 8955 webinar with Janice M Wegesin.
Individual Statements to Participants
The Internal Revenue Code has long required plans filing a Form 8955-SSA (and the prior Schedule SSA) to send each participant listed on the form an individual statement describing the information filed with respect to that person (Internal Revenue Code section 6057(e)). Penalties can apply of up to $50 per unsent statement. Penalties only apply if the plan is required to file the Form 8955-SSA - generally all plans subject to ERISA are required to file. The IRS has not traditionally enforced this statement requirement. As was mentioned above, the 2009 Form 8955-SSA now has a question inquiring whether the required statement was provided to participants and this would correspond to a new desire to enforce the requirement. In addition, the form collects information regarding whether the sponsor is covered by ERISA (and reporting voluntarily; question A) and the number of participants that are required to be reported on the form (question 6a).
The content of the statement is generally the information filed with respect to the participant on the Form 8955-SSA. There is an additional requirement that the "statement shall also include a notice to the participant of any benefits which are forfeitable if the participant dies before a certain date" (Internal Revenue Code section 6057(e)). This additional information would generally only apply to defined benefit plans. Statements are required to be mailed to the participant's last known address no later than the date on which the form is required to be filed.
Can PPA benefit statements suffice? This is an open question. Most plans could certainly argue the benefit statement at least fulfills the requirement that there was not a "willful failure" to deprive participants of the notice (8955-SSA instructions indicate only a "willful failure to furnish the statement or a willful furnishing of a false statement" will result in a penalty). On the other hand, the regulation provides "[t]he description provided the participant must include the information filed with respect to the participant on Schedule SSA" (Treasury Regulation 301.6057-1(e)). If the IRS reads this literally, it could argue the participant statements should include the entry codes from the 8955-SSA (A-D). Obviously this level of detail would not be included in a typical PPA benefit statement. Finally, for defined benefit plans, the additional disclosure of "of any benefits which are forfeitable if the participant dies before a certain date" would typically not be included in a PPA benefit statement and may be a stronger reason to issue the statements.
The simplest method (of course, at extra cost and effort) to ensure compliance is to send an additional statement to Participants required to be reported on the 8955-SSA. ftwilliam.com is offering a batch fulfillment process for the notices (similar to our 1099 fulfillment process). At a small fee, ftwilliam.com will send out standardized notices to all participants on a particular 8955-SSA. Users will need to upload some basic information on each participant (address, etc.).
2009 and 2010 Form 8955-SSA filing deadlines
In an IRS bulletin posted on June 21, 2011, the modified due date has been extended to the later of:
- January 17, 2012 and
- The due date that generally applies for filing the Form 8955-SSA for 2010.
A form 8955-SSA filing is due the last day of the seventh month following the last day of the plan year.
Extensions
In the same IRS bulletin released on June 21, 2011, it was stated that no Form 5558 extensions will be granted for the January 17, 2012 due date.
Note: The Form 8955-SSA Instructions state to mail the Form 5558 to an updated address:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0045
Paper and Electronic Filing
Once the final form has been released, preparers may choose one of three options to file. The new batch feature on ftwilliam.com is available for all three options.
- Print paper Form 8955-SSAs, have your client sign the form and mail to the IRS.
- E-file through the IRS FIRE system using a file created by ftwilliam.com.
Please note that Forms 8955-SSA may not be batched in the same way as 1099-Rs for filing on FIRE. IRS requires that each Form 8955-SSA be filed separately on the FIRE site. As a result, if you need to file 200 Form 8955-SSAs you will need to upload 200 separate files to the FIRE site.
Note: If you already have a TCC Code, you will have to apply for a new code specifically for the Form 8955-SSA.
- Utilize ftwilliam.com's batch fulfillment service to e-file the 8955-SSA.
No need to obtain a TCC Code. The fee for the batch fulfillment services will be $10 per batch, plus $1 per 8955-SSA. There is a fee of $0.84 per participant statement, if applicable.
Electronic Filing Process Requires No Signature
Paper Form 8955-SSAs must have the plan administrator and plan sponsor sign the bottom of page 1. However, if the plan administrator and plan sponsor are the same person, then only the plan administrator need sign. At this time, there are no signing requirements to e-sign. However, it is good practice to send the completed form (on paper or pdf) and ask clients to review, sign and keep a paper copy for their records.
No PTIN Required
No PTIN is required for a form 8955-SSA nor for the Form 5558 to receive an extension to file.
2010 form 8955-SSA - 2010 Information Reported on 2009 Form Until Released
Finally, although the IRS has released the 2009 form 8955-SSA, IRS indicated that it expects the 2010 form to be available 'later this year'. The 2010 filing should be filed using the 2009 form until the 2010 version is released.
Filers may file 2009 and 2010 information on the same form 8955-SSA. The form should reflect only the 2009 plan year dates at the top of the form. For example, you have a 2009 calendar year and a 2010 calendar year plan. You would enter 01/01/2009 - 12/31/2009. In addition, as indicated in the form's instructions, the number of participants reported for the 2009 plan year would be indicated in line 6a of the form and number participants reported for the 2010 plan year are indicated on line 6b.
In some cases, you may have a participants that has not been previously reported (Code A) for 2009 and in 2010 becomes a participant previously reported, but is no longer entitled to the deferred vested benefits (Code D). While there is no official guidance on this point, we would recommend that you do not report the participant - if combining the 2009 and 2010 information. It is recommend to report both if you are completing two separate Form 8955-SSAs, one for 2009 and one for 2010.
8955-SSA Webinars
There will be a free webinar on Thursday, July 14, 2011 1:00 pm Central Daylight Time. Holly Roussel-Godfrey will cover how to prepare the forms using ftwilliam.com and demonstrate our fulfillment process where we take care of the e-filing and/or participant notices for you. Click here to register.
Did you miss our 8955 webinar with Janice M. Wegesin? A recording of the webinar is available for $99. Click here to register. Janice explores the new form in detail, including the new electronic filing option and participant statements.
See our webinar page for other upcoming webinars.
If you have any questions please feel free to contact us at support@ftwilliam.com or call 800.596.0714.