Update - 2011 Form 1099-R Now Available

          Many governmental plans are reviewing the new 2011 1099-R Forms. The differences between the 2010 form and the 2011 form are addressed in the 2011 instructions for Forms 1099-R and 5498 that were issued earlier this year (go here to view our e-alert summarizing the changes to the 2011 instructions). In response to recent questions, we wanted to bring the following to the attention of governmental employers and plans as they review the instructions and use the Form to report distributions from their governmental retirement plans:

1. Pilot Program for Truncated Social Security Numbers Extended. During 2009 and 2010, the Internal Revenue Service (IRS) ran a pilot program that allowed a plan administrator to truncate an individual payee's nine-digit identifying number on paper Forms 1099-R. Although the 2011 instructions say the pilot program expired, this voluntary pilot program was extended. In Notice 2011-38 the IRS extended the pilot program as to paper Forms 1099-R furnished for calendar years 2011 and 2012, authorizing filers of Form 1099-R to truncate an identifying number on the Form notwithstanding the 2011 instructions that say otherwise.
2. Changes in 2011 Instructions. The new instructions provide reporting guidance on in-plan Roth rollovers and distributions allocable to in-plan rollovers from designated Roth accounts. The 2011 instructions also add a new box 10 for reporting those distributions, resulting in the subsequent boxes on the Form being renumbered. Former boxes 10 through 15 have been renumbered as boxes 12 through 17, respectively. Please note that for a direct rollover from a qualified governmental plan to a Roth IRA, the coding for Box 7 is code G, the same as for any direct rollover.
3. Challenges. With the changes to the 2011 Form 1099-R and the renumbered boxes as noted above, some governmental employers and plans may encounter problems with the reporting format if they have developed their own forms and do not use the standard Form 1099-R. In such a case, governmental plans and employers will want to confirm that their reporting format is consistent with the IRS reporting requirements and will work correctly on the electronic transmission to the IRS.

          If you have any questions or would like additional information about Form 1099-R reporting for 2011, please contact Terry Mumford, Mary Beth Braitman, Katrina Clingerman, Lisa Harrison, or your Ice Miller employee benefits attorney.