What Is the Purpose of Form 8955-SSA?
Learn about the essential IRS reporting that connects former employees with their deferred retirement plan benefits through the Social Security Administration.
Form 8955-SSA, the “Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits,” is an Internal Revenue Service (IRS) form. It is a reporting tool for retirement plans to inform the IRS about former employees who left the company but still retain a right to future benefits. The IRS shares this information with the Social Security Administration (SSA), so when these individuals apply for Social Security, the SSA can notify them that they may also be entitled to retirement income from a previous employer.
Who Must File Form 8955-SSA
The responsibility for filing Form 8955-SSA falls upon the plan administrator of a retirement plan subject to the vesting standards of the Employee Retirement Income Security Act (ERISA). This includes common retirement plans, such as 401(k)s, traditional defined benefit pension plans, and certain 403(b) plans. The filing requirement is triggered for a plan year in which one or more participants separate from service with a “deferred vested benefit.”
A deferred vested benefit means the participant has earned a non-forfeitable right to their retirement account but has not yet been paid those funds. Filing is only required when a participant who fits this description separates from the company during the plan year and was not previously reported. If a plan has no separated participants with deferred vested benefits to report for a given year, a Form 8955-SSA is not required.
The form is also used to update the status of previously reported participants. For instance, if a formerly reported individual is later paid their full benefit or returns to work for the company, the plan administrator must file the form to report this change. This continuous updating ensures the SSA’s records remain accurate.
Information Required for Form 8955-SSA
To complete Form 8955-SSA, the plan administrator must gather specific details for each former employee. This includes the participant’s Social Security number and full name, which are used by the SSA to match the benefit information to the correct person when they apply for Social Security.
The form also requires codes to specify the nature of the reporting. For example, Entry Code A is used for a participant being reported for the first time. Entry Code D indicates a participant who was previously reported has since been paid their benefit and is no longer entitled to a deferred vested benefit.
For each participant, the plan must report the value of their deferred vested benefit, which is the total value of the participant’s account. If the benefit is to be paid as an annuity, details such as the frequency and amount of the periodic payment are also required. The official form and its detailed instructions are available on the IRS website.
The Filing Process and Deadlines
The plan administrator must submit Form 8955-SSA to the IRS. It is a stand-alone form and must not be filed with the Form 5500 series returns. Electronic submission is mandatory through the IRS’s Filing Information Returns Electronically (FIRE) system for those required to file 10 or more returns of any type during the calendar year.
The filing deadline for Form 8955-SSA is the last day of the seventh month following the end of the plan year. For plans that operate on a calendar year, this deadline is July 31. The IRS allows for an automatic 2.5-month extension.
To receive this extension, the plan administrator must file Form 5558, Application for Extension of Time To File Certain Employee Plan Returns, on or before the original due date. This pushes the deadline to October 15 for calendar-year plans.
Consequences of Filing Failures
The IRS enforces the timely and accurate filing of Form 8955-SSA through a penalty structure. A failure to file the form by its due date, including any extensions, results in a penalty of $10 per day for each participant who was not reported. This daily penalty can accumulate up to a maximum of $50,000 per plan year.
Additionally, a penalty of $50 is imposed for each willful failure to provide the required statement to a plan participant. These penalties underscore the importance of compliance for plan administrators.