2016 Form 5500-EZ and Instructions; 2016 Form 8955-SSA and Instructions
The IRS has released the 2016 Form 5500-EZ (Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan) and 2016 Form 8955-SSA (Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits), along with their separate Instructions. Form 5500-EZ is filed with the IRS, in paper format only, by one-participant retirement plans that have assets exceeding $250,000 at the end of the plan year and by certain foreign retirement plans. Form 8955-SSA, filed with the IRS in paper or electronic format, reports certain information relating to separated plan participants with vested benefits that have not been distributed. Here are brief highlights of the 2016 forms:
Form 5500-EZ. Part I of Form 5500-EZ includes new line D, to be checked if the filing is being made under the IRS Late Filer Penalty Relief Program (see our Checkpoint article). The Instructions provide additional information on this program. The 2016 form includes some, but not all, of the IRS compliance questions that were on the 2015 form; both the form and the Instructions again direct filers to skip these questions. Interestingly, the Instructions indicate that the IRS expects that the compliance questions will not be included on the 2017 Form 5500-EZ. Filers can also skip the preparer’s information at the bottom of the second page of the form. A new note under “Who Does Not Have to File Form 5500-EZ” states that the $250,000 threshold for filing should be determined using the plan asset amount on line 7a(2) and that all of an employer’s one-participant retirement plans must be aggregated to determine whether the threshold is met. Other new items in the Instructions include the addition of DHL Express as an eligible private delivery service; an instruction that cash, modified cash, and accrual-basis accounting methods can be used so long as one method is used consistently (Part III); and a clarification that all applicable plan characterization codes should be entered (Part IV).
Form 8955-SSA. There are no changes to the 2016 Form 8955-SSA from the 2015 form. Two changes to the Instructions are the addition of DHL Express as a private delivery service and a clarification that the $50 penalty applies to a plan administrator’s failure to provide an “individual” statement to each affected participant if the failure is willful. [EBIA Comment: ERISA requires that a terminated participant be provided with an individual statement when the terminated participant is reported to the Social Security Administration (SSA) as having a deferred vested benefit. The individual statement must be provided by the deadline for Form 8955-SSA.]
EBIA Comment: As a reminder, certain one-participant retirement plan filers must file electronically, and instead of filing paper Form 5500-EZ are required to file using Form 5500 or 5500-SF through the DOL’s EFAST2 filing system (see our Checkpoint article). Similarly, filers of Form 8955-SSA that are required to file electronically must do so using the IRS’s FIRE filing system. For more information, see EBIA’s 401(k) Plans manual at Sections XXXI.M (“IRS Filings Related to Form 5500”) and XXVI.L.4 (“Quarterly Benefit Statements: Other Requirements”).
Contributing Editors: EBIA Staff.