Understanding Form 8955-SSA and Its Role in Retirement Benefit Plans

Retirement plans are a critical component of an employee’s financial future, and the proper management of these plans is essential to ensure that participants receive their benefits as expected. One of the key forms associated with managing these plans is Form 8955-SSA, a document required by the Internal Revenue Service (IRS) to keep the Social Security Administration (SSA) informed about participants who are entitled to benefits from a retirement plan but have not yet received them.

Form 8955-SSA is specifically designed to report participants who have separated from employment and are entitled to future benefits under the retirement plan. The form must be filed annually by the plan administrator, typically in conjunction with the plan’s Form 5500 series filing, though it is a separate submission. The purpose of this form is to provide the SSA with a record of these individuals so that they can follow up with them when they reach retirement age or otherwise become eligible to receive their plan benefits.

The information reported on Form 8955-SSA includes the name, Social Security number, and the nature of the deferred vested benefit for each plan participant who has separated from service. This reporting is crucial because it ensures that individuals do not lose track of their benefits and that the SSA can notify them when it’s time to claim those benefits. In essence, it acts as a safeguard for participants who may forget about benefits they earned earlier in their careers, which is particularly important in the context of today’s more mobile workforce.

Employers managing retirement plans are required to submit Form 8955-SSA annually if they have participants who have left the company and are entitled to future benefits. The due date for this form aligns with the deadline for filing the plan’s Form 5500, typically the last day of the seventh month following the end of the plan year. However, a two-and-a-half-month extension can be granted if Form 5558 is filed. Failing to file Form 8955-SSA can result in penalties, making it imperative for plan administrators to stay on top of these requirements.

Form 8955-SSA is not only a compliance tool but also a protective measure for plan participants. For instance, if a participant is unaware of their entitlement to benefits or loses contact with the plan administrator, the SSA can use the information from the form to track them down and notify them of their benefits. This process helps to prevent scenarios where retirement benefits go unclaimed, which can occur when employees move, change their names, or otherwise lose contact with their former employer.

In summary, Form 8955-SSA plays a vital role in ensuring that participants in retirement plans receive the benefits they are entitled to. By requiring plan administrators to report participants who have separated from service but have deferred vested benefits, the form helps safeguard the financial interests of employees as they move through their careers. Plan administrators must remain diligent in filing this form annually to comply with IRS regulations and to support the long-term financial security of their plan participants.

References:

[1] Internal Revenue Service. (2023). Instructions for Form 8955-SSA. Retrieved from https://www.irs.gov/instructions/i8955ssa 

[2] U.S. Department of Labor. (2023). Filing Requirements for Retirement Plans. Retrieved from https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/filing-and-reporting/5500 

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