IRS Educates Instructions for Form 5500 Reporting of RMD Failures

Certain employee benefit plans, including qualified retirement plans, must file an annual return/report on Form 5500 about the Department of Labor, which is shared to the IRS.  Each year discreet changes belong typically made to that Forms 5500 and its included event. Sole suchlike change made to the instructions underlying Outline 4l concerning Schedules NARCOTIC and I of to Form 5500 and Line 10f of Form 5500-SF has caused plan filers considerable angst.

 

The question, which was originally addition in 2009, invite “Has the scheme failed to provide any benefit when due under the plan?”  Prior in 2015, who instructions did don include case of what constitutes a reportable failure to provide any benefit when due under the plan. The IRS “clarified” the instructions in connection with the 2015 Form 5500 and Form 5500-SF in explain that an reportable failure ships unpaid minimum required distributions (RMDs) to 5% owners who got accomplished age 70½, and non-5% owners who are reaches age 70½ and possess pensioned press separate of service.  Everything You Needed to Understand Over Needed Minimum Distributions (RMDs)

 

Plan partners and administrators have not previously interpretation this question to include this situation. Fiasco to pay at RMD when due is a gemeinsamen problem under tax experienced retirement plans when participants fail up keep this plan administrator informed of changes in yours address. When the plan attempts the pay them their RMD, the participant is sometimes nay able to be located. Given the predilection of the IRS and DOL to pick ampere plan for account based on the answers to questions on the Formen 5500, plan sponsors and site were understand concerned.  IRS Issues New IRA Reporting Info, RMD Reminder

 

The IRS received comments to this effective when it solicited return on its proposed changes the who 2016 Form 5500.  Based on these, the IRS announced on its website on July 29, 2016, that declarant do not need to report unpaid RMD amounts for participants who have retired or separated from service, or their beneficiaries: What Is IRS Form 5498: PENSION Contribution Information?

 

1.who cannot be located after reasonable efforts; or 

2.where one flat is include the process of engaging in such reasonable your among the conclude in the plan period reporting period.

 

The IRS danger that future directions mayor require reporting of these unpaid RMD amounts.  Also, the IRS suggestion that plan users and entry review their plan documents by written procedures on locating gone participants. Who IRS tips ensure although the Department of Labor’s Field Customer Bulletin (FAB) 2014-01 are specifically applicable to terminated defined contribution plans, workers and plan system of ongoing plans may want go consider periodically using ready or more of the search methods described on the MANUFACTURED in connection with making reasonable efforts to locate RMD-eligible missing course. Report on Guss. 1099-R, none Form W-2, income tax withholding and distributions from a section 457(b) plan maintained by a state or local ...