If you’re a plan sponsor or involved in retirement plan administration, you’ve likely heard of Form 8955-SSA. But what exactly is it, and why is it important? Let’s break it down into simple terms.
What is Form 8955-SSA?
Form 8955-SSA, also known as the Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits, is a form that notifies the IRS about individuals who have left their jobs but still have vested benefits waiting for them. Think of it as a way to keep track of former employees who are entitled to receive benefits from their retirement plans, even though they no longer work for your company.
The “SSA” in the form’s name stands for Social Security Administration. This is because the SSA uses this information to inform former employees that they have retirement benefits available to them when they apply for Social Security. It’s a crucial step in ensuring that people don’t miss out on the benefits they’ve earned.
Who Needs to File Form 8955-SSA?
If you’re a plan sponsor required to file Form 5500, you’ll also need to file Form 8955-SSA if there are participants who have left the company but still have vested benefits owed to them. In other words, if an employee has parted ways with your company but is still entitled to retirement benefits, you’ll need to report this to the IRS.
You’ll also need to file this form if there’s a change in the status of a terminated participant. For example, if someone has received their benefit or is no longer entitled to it, this should be reported on the form. Filing this form helps keep everything in order and ensures compliance with IRS regulations—making sure no one falls through the cracks.
Why is Form 8955-SSA Important for Retired Employees?
For former employees, Form 8955-SSA is a lifeline to their deferred benefits. The SSA uses the information from this form to notify individuals about their vested benefits when they file for Social Security. This ensures that retirees don’t lose out on the benefits they’ve earned over their working years. It’s a way of saying, “Hey, don’t forget—you have benefits waiting for you!”
Key Deadlines You Should Know
Staying on top of deadlines is essential. Form 8955-SSA is due at the same time as Form 5500, which is generally seven months after the end of the plan year. If you’ve applied for an extension using Form 5558, then you have until nine months after the plan year ends to file both forms. It’s worth noting that while Form 8955-SSA is filed with the IRS, Form 5500 goes to the Department of Labor, so keeping track of these details is crucial to avoid penalties.
Need Help with Filing? You’re Not Alone!
The world of retirement plan administration can be overwhelming, but there’s help available. For instance, companies like Pinnacle Plan Design specialize in managing employer-sponsored retirement plans. Whether it’s a 401(k) plan, defined benefit plan, or something more complex like a cash balance plan, these third-party administrators (TPAs) can take the burden off your shoulders. They handle everything from plan design to compliance, so you can focus on what you do best—running your business.
Form 8955-SSA might seem like just another piece of paperwork, but it plays a crucial role in ensuring that former employees get the benefits they’ve worked hard for. As a plan sponsor, staying on top of your filing responsibilities isn’t just about compliance—it’s about doing right by your former employees. If you’re ever in doubt or need assistance, remember that help is just a call away.
By keeping these tips in mind, you’ll be well-prepared to handle Form 8955-SSA with confidence, ensuring that everyone gets the benefits they deserve.