IRS Updates Instructions for Form 8955-SSA

The IRS has updated the instructions for Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits. While these instructions, and the form itself, may not be relevant to all 403(b) plans, they are relevant to those to which ERISA Section 203 applies. 

Plan administrators of a 403(b) plan that is subject to the vesting standards of Section 203 of ERISA must file a Form 8955-SSA for the plan’s deferred vested participants. A plan administrator is not required to report a separated participant if the participant’s deferred vested benefits are attributable to an annuity contract or custodial account that is not required to be treated as part of the 403(b) plan assets for purposes of the reporting requirements of ERISA Title I, as set forth in Department of Labor (DOL) Field Assistance Bulletin (FAB) 2009-02. 

For this exception to apply:

1. the contract or account would have to have been issued to a current or former employee before Jan. 1, 2009; 
2. the employer would have to have ceased having any obligation to make contributions (including employee salary reduction contributions), and in fact ceased making contributions to the contract or account before Jan. 1, 2009; 
3. all the rights and benefits under the contract or account would have to be legally enforceable against the issuer or custodian by the participant without any involvement by the employer; and 
4. the participant would have to be fully vested in the contract or account.

The Form Itself

Form 8955-SSA is used to report information relating to each participant who separated from service covered by the plan and is entitled to a deferred vested benefit under the plan but is not paid this retirement benefit. The information reported on Forms 8955-SSA generally is given to the Social Security Administration, which provides the reported information to separated participants when they file for Social Security benefits.

More specifically, the plan administrator of each plan subject to the vesting requirements must file Form 8955-SSA for participants who have a deferred vested benefit under the plan and: 

• separated from service covered by the plan, but vested retirement benefits are not paid and were not previously reported (using Entry Code A in Part III, line 9, column (a)); 
• were previously reported under the plan but whose information is being corrected (using Entry Code B in Part III, line 9, column (a)); 
• were previously reported as deferred vested participants on another plan’s filing if their benefits were transferred (other than in a rollover) to the plan of a new employer during the covered period (using Entry Code C in Part III, line 9, column (a); or 
• were previously reported under the plan but have been paid out or are no longer entitled to those deferred vested benefits (using Entry Code D in Part III, line 9, column (a)).