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Employee Plans Compliance Unit (EPCU) - Completed Projects - One Participant Defined Benefit Plan Schedule SB

Federal law requires defined benefit pension plans to complete Schedule SB or MB annually as part of their annual Form 5500 series information returns. One-participant defined benefit plans are required to prepare and retain Schedule SB as part of their plan records but are not required to file it with Form 5500-EZ.

Project activities

The project was designed to ascertain compliance with the requirement to prepare and retain Schedule SB. We corresponded with a sample of 192 plan sponsors from a population of more than 31,000 defined benefit plans that filed Form 5500-EZ for plan years ending in 2010 to ensure each plan had retained the Schedule SB prepared by actuaries as required.The EPCU conducted the One Participant DB Plan Schedule SB Project from November 2012 through December 2013. 

We verified that the actuaries were listed in the current roster of actuaries enrolled to practice before the IRS and reviewed the dates the Schedules SB were prepared.

Project results

More than 96% of sponsors responding had Schedules SB timely prepared and had retained them as required. Approximately 1% involved minor errors and we were unable to contact another 1%.  Fewer than 2% warranted further review beyond the project.

Results: Count Ratio
Schedule SB was timely prepared and retained 185 96.35%
Referral for further review: Sch SB error and other issues 2 1.04%
Unable to Locate Sponsor 2 1.04%
Taxpayer Error on Return: Sch SB prepared/retained 1 .52%
IRS Processing Error: Sch SB prepared/retained 1 .52%
Prior Submission to Voluntary Compliance for Correction 1 .52%
Grand Total 192 100.00%

Conclusions

The 2010 population of very small defined benefit plans are mostly compliant with this requirement; the risk of noncompliance is small.

Recommendations

We believe current practices regarding the preparation and retention of Schedule SB for one participant defined benefit plans are adequate for purposes of administering these pension plans; we recommend these practices continue without modification.

Page Last Reviewed or Updated: 18-Aug-2016