Читать книгу Auditing Employee Benefit Plans - Josie Hammond - Страница 71

The effective date of a plan merger, on relevant plan merger agreements or documents, is often prior to the actual date of transfer of plan assets. Form 5500 instructions also indicate that “a final return or report should be filed for the plan year (12 months or less) that ends when all plan assets were legally transferred to the control of another plan.” As a result, confusion often exists in determining the last reporting date for the financial statements and Form 5500 when a plan merger occurs.

For defined benefit plans, a merger is typically recorded on the effective date based on merger agreements or documents, as legal title and liabilities are transferred on the merger date. Therefore, if there is a difference between effective date and transfer date, it may be appropriate to record a liability for net assets to be transferred to the acquiring plan at year-end. Depending on the timing of the transfer, the receiving plan may record an asset or receivable.

For defined contribution plans, if a significant difference in dates exists, it may be appropriate to perform an audit through the date of the actual transfer. However, all facts and circumstances should be considered in determining the proper date of merger. For instance, because a plan may hold assets in more than one trust, a surviving plan may report assets held in a predecessor plan’s trust account when they have legal control of those assets or trust before the assets are physically transferred to the trust of the surviving plan. The plan administrator may need to seek legal counsel for assistance in determining the last reporting date when assets were legally transferred to the control of a successor plan.