April 12, 2011

Be Sure You are Correctly Reporting to the IRS on Retirement Plans

 Do you contribute to another retirement plan? If you do, you may need to report those contributions to Vanderbilt to meet IRS requirements.

The Internal Revenue Service requires Vanderbilt to collect certain information on employee contributions made to retirement plans outside of Vanderbilt’s 403(b) retirement plan. Not all contributions need to be reported however. To help you determine whether you need to report your contributions to another retirement plan, answer the following questions for 2010:

1. Are you eligible to participate in the Vanderbilt University Retirement Plan?
2. Do you own controlling interest (more than 50 percent) in a for-profit business, including a sole proprietorship and/or consulting business?
3. Do you make contributions to a qualified retirement plan — 401(k), 401(a) and 403(b) plans, or simplified employee pensions (SEPs) and Keogh plans — through that business?

In order to be compliant with Internal Revenue Code 415(g) regulations, if you answered yes to all three questions you must complete and return the “Internal Revenue Code Section 415(g) Aggregation Form” for 2010, which can be found at http://hr.vanderbilt.edu/forms/index.php.

Drop off the completed form to HR Express, 2525 West End Ave. on the second floor, or mail it to:
Attn: Section 415
Benefits Administration
PMB 407700
2301 Vanderbilt Place
Nashville, TN 37240-7700

You may also fax or email the form to the number or email address noted on the form.

It is your responsibility to report outside contributions to Vanderbilt to avoid the risk of penalties due to inappropriate withholding. The tax consequences of noncompliance are potentially very severe. The full value of your Vanderbilt account and the account of your outside plan may be taxed and these taxes may include civil and criminal financial penalties.

This information must be collected and used for IRS ‘contribution limit testing’ by Vanderbilt University (as plan sponsor) in order to monitor compliance with applicable limitations. More information on these limits imposed by the IRC 415(g) is available at the IRS website.

Contact your tax advisor for more information and help with completing the required form.

The Office of Benefits Administration is legally not able to provide tax advice on retirement contributions.

For information on the Vanderbilt Retirement Plan, contact benefits@vanderbilt.edu.