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5500 Preparer's Manual for 2012 Plan Years

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CCH® PENSION — 03/25/10

Fewer Defined Benefit Plans, More 401(k) Plans, But Only A Net Gain Of 34 New Plans In Fiscal 2009

from Spencer’s Benefits Reports: The Internal Revenue Service issued 17,847 determination letters to qualified retirement plans during the fiscal year ending Sept. 30, 2009, according to statistics in the IRS’s Data Book, 2009. There was a net gain of 34 new retirement plans during the year (3,329 initial qualification letters versus 3,295 plan terminations). The IRS reported that 11,223 plans received approval letters for plan amendments.

The number of qualified defined benefit plans continues to decline. There were 1,400 new defined benefit plans covering 422,199 participating employees versus 1,450 terminating defined benefit plans covering 685,815 participating employees. According to the Data Book, the IRS approved amendments to 3,359 defined benefit plans covering 6,905,522 participating employees.

New defined contribution plans continued to grow, albeit slowly, with a net gain of 84 plans. The IRS approved 1,929 new defined contribution plans covering 1,075,034 participating employees versus 1,845 terminating defined contribution plans covering 1,670,555. Only profit-sharing plans had growth: 217 new plans. Profit-sharing plans also had a large gain in new participating employees (768,832). There were 1,792 new profit-sharing plans covering 896,240 participating employees versus 1,575 terminating profit-sharing plans covering 127,408. All other types of defined contribution plans (including money purchase, employee stock ownership, and ‘other’ plans) experienced net losses in the number of new plans.

The IRS reported a net gain of 349 in the number of new 401(k) plans (950 new 401(k) plans versus 601 terminating 401(k) plans). However, there was a huge drop in the number of participating employees covered by 401(k) plans—1,398,755 (173,862 new participants versus 1,572,617 terminating participants). The totals shown here for 401(k) plans are already counted in the defined contribution totals (see the previous paragraph) because 401(k) plans have been qualified as profit-sharing, money purchase, and other types of defined contribution plans.

The IRS examined 5,647 employee plan tax returns during the fiscal year ending Sept. 30, 2009. Of that total, 4,344 examinations involved Form 5500 filings (582 defined benefit plans and 3,762 defined contribution plans). There were 1,303 examinations involving Form 5500-EZ filings of which 321 involved defined benefit plans and 982 involved defined contribution plans.

The 2009 Data Book reported that there were 3,168 voluntary compliance agreements involving employee plans during the 2009 fiscal year. There were 558 requests for rulings, 69 requests for technical assistance, 153 technical advice requests, and 97 requests for opinion letters on prototype plans, including opinion letters issued to IRAs, Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLEs).

For more information, visit http://www.irs.gov/pub/irs-soi/09databk.pdf.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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