Employee Plans Compliance Unit (EPCU) - Current Projects - Funding Deficiencies |
|
Background
Plans subject to the minimum funding requirements under section 412 of the Internal Revenue Code must report whether the funding requirement has been met for the plan year when filing the Form 5500, Annual Return/Report of Employee Benefit Plan. The purpose of this project is to ensure that plan sponsors, who report having funding deficiencies under section 412, have taken the necessary corrective actions.
The Project Process
When a funding deficiency is reported on a filed return, the EPCU will determine whether a funding deficiency exists. If it appears one does exist, a compliance check will be sent. We will determine whether the funding deficiency was corrected, the required excise tax return(s) were filed and appropriate taxes paid. Both defined benefit and defined contribution plans with reported funding deficiencies of at least $5,000 are included in this project.
Category of Responses
The responses to the compliance checks can generally be divided into the following:
-
No funding deficiency existed.
-
Contribution issues (not made, amounts, timeliness).
-
Excise tax return issues.
-
Plan sponsor issues (sponsor no longer exists, has been merged or incorporated into another business).
-
Taxpayer is engaged in discussions with R&A for funding waivers and/or termination letters.
-
Taxpayer is or has engaged in discussions with DOL and/or PBGC.
-
Taxpayer has filed for bankruptcy.
-
Incorrect completion of the Schedule R filed with the 5500 return.
If You Receive A Letter
Please provide the information requested contained in the letter. You may also furnish any other documents or clarifying material that you believe will be helpful for us to review. You should make every effort to answer the questionnaire as accurately as possible. Failure to provide this information could result in further action or examination of your plan.
If You Have Questions
Please feel free to e-mail us and we will be glad to answer any questions you have about the project and how it relates to your situation. Please indicate “Minimum Funding” in the Subject line of the message.
Other Resources
-
-
Schedule B ( Instructions), Actuarial Information; required to be submitted by the employer or plan administrator of a defined benefit plan subject to minimum funding requirements.
-
-
Form 5330 Corner – EP internet page which includes a list of common errors made when completing Form 5330.
-
EP Examination Process Guide – This section describes the participant rights with regard to Request of a Waiver of the Minimum Funding Requirement.
|
|
|
Page Last Reviewed or Updated: March 11, 2009