IRS Replaces Vested Benefits Form

The Internal Revenue Service (IRS) has developed a new form that retirement plan administrators should use to identify separated participants with deferred vested benefits.

The new form, Form 8955-SSA, will replace the old Schedule SSA that plans have been filing along with their Form 5500 returns, IRS officials say in IRS Announcement 2011-21.

Section 6057(a) of the Internal Revenue Code requires plans to send information about each participant with vested benefits in accordance with rules to be developed by the U.S. Treasury Department.

Plans have been recording the vested participants on Schedule SSA.

The IRS decided to separate the vested participant list from the Form 5500, because the Labor Department started requiring plans to file Form 5500 returns electronically for plan years beginning on or after Jan. 1, 2009.

The electronic filing mandate does not apply to the Section 6057(a) vested participant lists.

The IRS says it will make the new Form 8955-SSA available shortly and hopes plan administrators will use it for the 2009 plan year. The IRS is also about to release a Form 8955-SSA for the 2010 plan year.

"Plan administrators are permitted to report information that would otherwise be required to be reported on the 2010 Form 8955-SSA using a 2009 Form 8955-SSA," officials say in the announcement.

The IRS also has developed a voluntary electronic filing system for filing the Form 8955-SSA lists.

If a plan administrator gets a Schedule SSA form for the 2009 or 2010 plan year into the IRS by April 20, 2011, the IRS will let the administrator use the old SSA form, rather than requiring the administrator to shift to the new form, officials say.

Officials note that plan administrators should still use the Form 5500 return to report the plan status change information required by Section 6057(b).

- Allison Bell