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Instructions for Form 5500 (Revised 2002) 2002 Tax Year

Annual Return/Report of Employee Benefit Plan (Info Copy Only)

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2002 Instructions for Schedule D

(Form 5500) DFE/Participating Plan Information

General Instructions

Purpose of Schedule

When the Form 5500 is filed for a plan or DFE that invested or participated in any MTIAs, 103-12 IEs, CCTs and/or PSAs, Part I provides information about these entities. When the Form 5500 is filed for a DFE, Part II provides information about plans participating in the DFE.

Who Must File

Employee Benefit Plans:   Schedule D must be attached to a Form 5500 filed for an employee benefit plan that participated or invested in one or more common/collective trusts (CCTs), pooled separate accounts (PSAs), master trust investment accounts (MTIAs), or 103-12 Investment Entities (103-12 IEs) at anytime during the plan year.

Direct Filing Entities:   Schedule D must be attached to a Form 5500 filed for a CCT, PSA, MTIA, 103-12 IE or Group Insurance Arrangement (GIA), as a Direct Filing Entity (i.e., when Form 5500 Part I, line A(4) is checked). For more information, see instructions for Direct Filing Entity (DFE) on pages 4 and 9 of the instructions for the Form 5500.

Check the Schedule D box on the Form 5500 (Part II, line 10b(5)) if a Schedule D is attached to the Form 5500. Multiple Schedule D pages must be attached to the Form 5500 if necessary to report the required information. You can get additional hand print pages by calling 1-800-TAX-FORM (1-800-829-3676) to request additional schedules.

Specific Instructions

Lines A, B, C, and D.   The information should be the same as reported in Part II of the Form 5500 to which this Schedule D is attached. You may abbreviate the plan name (if necessary) to fit in the space provided.

Part I - Information on Interests in MTIAs, CCTs, PSAs, and 103-12 IEs (To Be Completed by Plans and DFEs)

Use as many pages as necessary to enter the information specified below for all MTIAs, CCTs, PSAs, and 103-12 IEs in which the plan or DFE filing the Form 5500 participated at anytime during the plan or DFE year.

Complete a separate item (elements (a) through (e)) for each MTIA, CCT, PSA, or 103-12 IE.

Element (a).   Enter the name of the MTIA, CCT, PSA, or 103-12 IE in which the plan or DFE filing the Form 5500 participated at any time during the plan or DFE year.

Element (b).   Enter the name of the sponsor of the MTIA, CCT, PSA, or 103-12 IE named in (a).

Element (c).   Enter the nine-digit employer identification number (EIN) and three-digit plan/entity number (PN) for each MTIA, CCT, PSA, or 103-12 IE named in (a). This must be the same EIN/PN as reported on lines 2b and 1b of the Form 5500 filed for the DFE. If a Form 5500 was not filed for a CCT or PSA named in element (a), enter the EIN for the CCT or PSA and enter 000 for the PN.

Element (d).   Enter an M, C, P, or E, as appropriate, (see table below) to identify the type of entity (MTIA, CCT, PSA, or 103-12 IE).

Type of entity Down Arrow Enter in (d) Down Arrow
MTIA M
CCT C
PSA P
103-12 IE E

Element (e).   Enter the dollar value of the plan's or DFE's interest as of the end of the year. If the plan or DFE for which this Schedule D is filed had no interest in the MTIA, CCT, PSA, or 103-12 IE listed at the end of the year, enter "0".

Example for Part I:   If a plan participates in a MTIA, the MTIA is named in element (a); the MTIA's sponsor is named in element (b); the MTIA's EIN and PN is entered in element (c) (such as: 12-3456789-001); an "M" is entered in element (d); and the dollar value of the plan's interest in the MTIA as of the end of the plan year is entered in element (e).

If the plan also participates in a CCT for which a Form 5500 was not filed, the CCT is named in another element (a); the name of the CCT sponsor is entered in element (b); the EIN for the CCT, followed by 000 is entered in element (c) (such as: 99-8765432-000); a "C" is entered in element (d); and the dollar value of the plan's interest in the CCT is entered in element (e).

If the plan also participates in a PSA for which a Form 5500 was filed, the PSA is named in a third element (a); the name of the PSA sponsor is entered in element (b); the PSA's EIN and PN is entered in element (c) (such as: 98-7655555-001); a "P" is entered in element (d); and the dollar value of the plan's interest in the PSA is entered in element (e).

Part II - Information on Participating Plans (To Be Completed by DFEs)

Use as many pages as necessary to enter the information specified below for all plans that invested or participated in the DFE at any time during the DFE year.

Complete a separate item (elements (a) through (c)) for each plan.

Element (a).   Enter the name of each plan that invested or participated in the DFE at any time during the DFE year. GIAs need not complete element (a).

Element (b).   Enter the sponsor of each investing or participating plan.

Element (c).   Enter the nine-digit EIN and three-digit PN for each plan named in element (a). This is the EIN and PN entered on lines 2b and 1b of the plan's Form 5500. GIAs should enter the EIN of the sponsor listed in element (b).

2002 Instructions for Schedule E

(Form 5500) ESOP Annual Information

General Instructions

Purpose of Schedule

Use this schedule to satisfy the requirements under Code section 6047(e) for an annual information return for an employee stock ownership plan (ESOP).

Who Must File

Every employer or plan administrator of a pension benefit plan that contains ESOP benefits must file a Schedule E (Form 5500).

How To File

File Schedule E (Form 5500) annually as an attachment to Form 5500 or 5500-EZ. If more than one securities acquisition loan (see specific instructions for lines 6 through 11) is outstanding, you must file one Schedule E (Form 5500) and an attachment for each additional securities acquisition loan and label the attachment Schedule E, lines 6 through 11 - Additional Securities Acquisition Loans. Each attachment must provide answers to questions 6 through 11, be in a similar format to, and on the same size paper as, the Schedule E.

Check the Schedule E box on the Form 5500 (Part II, line 10a(4)) if a Schedule E is attached to the Form 5500.

Note.   The Small Business Job Protection Act repealed the partial interest exclusion of Code section 133 effective, in general, with respect to loans made after August 20, 1996. However, Schedule E (Form 5500) must be filed for securities acquisition loans made to ESOPs before August 21, 1996, loans made pursuant to a written binding contract in effect before June 10, 1996, and at all times thereafter before the loan was made, and certain loans made after August 20, 1996, to refinance a securities acquisition loan originally made on or before August 20, 1996.

CAUTION: If the employer maintaining the ESOP is an S corporation and Schedule E is attached to a Form 5500, enter 2Q and other applicable codes on Form 5500, Part II, line 8.

Specific Instructions

Lines A, B, C, and D.   This information should be the same as reported in Part II of the Form 5500 to which this Schedule E is attached. You may abbreviate the plan name (if necessary) to fit in the space provided.

Line 3.   If the schedule does not provide enough space, enter ATTACHED and provide the required formula(s) as an attachment to Schedule E.

Lines 6 through 11.   A "securities acquisition loan" is an exempt loan to an ESOP to the extent that the proceeds are used to acquire employer securities for the plan.

Line 6.   A "back to back loan" is a securities acquisition loan from a lender to an employer corporation followed by a loan from the corporation to the ESOP maintained by the employer corporation. A "back to back loan" constitutes a "securities acquisition loan" under Code section 133 if the following requirements are satisfied:

  1. The loan from the employer corporation to the ESOP qualifies as an exempt loan under Treasury Regulation sections 54.4975-7 and 54.4975-11;
  2. The repayment terms of the loan from the corporation to the ESOP are "substantially similar" (as defined in Temporary Income Tax Regulations section 1.133-1T) to the repayment terms of the loan from the corporation to the lender; and
  3. If the loan from the corporation to the ESOP provides for more rapid repayment of principal and interest, the allocations under the ESOP attributable to such repayments do not discriminate in favor of highly compensated employees (within the meaning of Code section 414(q)).

Line 7.   An immediate allocation loan is any loan to an employer corporation to the extent that, within 30 days, employer securities are transferred to the ESOP maintained by the corporation in an amount equal to the proceeds of the loan and the securities are allocable to the accounts of plan participants within one year of the date of the loan. (See Code section 133(b)(1)(B).)

Line 8c.   The transition rules of Act section 7301(f)(2) through (6) of the Omnibus Budget Reconciliation Act of 1989 (OBRA), P.L. 101-239, provide that the amendments made to Code section 133 by OBRA will not apply to certain loans that satisfy the requirements of those paragraphs. In general, the amendments made by OBRA will not apply to:

  1. Loans made pursuant to a binding written commitment in effect on June 6, 1989, and at all times thereafter before the loan was made, or pursuant to a written binding contract (or tender offer registered with the Securities and Exchange Commission (SEC)) in effect on June 6, 1989, and at all times thereafter before such securities were acquired.
  2. If subparagraph 1 does not apply, loans made pursuant to a binding written commitment in effect on July 10, 1989, and at all times thereafter before the loan was made, but only to the extent that the proceeds were used to acquire employer securities pursuant to a certain binding written contract (or tender offer registered with the SEC) in effect on July 10, 1989, and at all times thereafter before the securities are acquired.
  3. Any loan made on or before July 10, 1992, pursuant to a written agreement entered into before July 10, 1989, if the agreement evidences the intent of the borrower to enter, on a periodic basis, into securities acquisition loans described in Code section 133(b)(1)(B) (as in effect before December 19, 1989). This rule applies only if one or more securities acquisition loans were made to the borrower on or before July 10, 1989.

See Act section 7301(f)(2) to determine the specific requirements of the transition rules described above. See Act section 7301(f)(3) through (6) for additional transition rules on refinancings, collective-bargaining agreements, filings with the United States, and the 30% test for certain loans.

Line 9.   If the loan is a back to back loan or an immediate allocation loan, enter the amount of interest paid by the employer corporation to the lender(s) during the plan year.

Line 11b.   The repeal of Code section 133 by Act section 1602 of SBJPA 1996 does not apply to a refinancing of an ESOP securities acquisition loan made after August 20, 1996, or pursuant to a binding contract in effect before June 10, 1996, if:

  1. The refinancing loan meets the requirements of Code section 133 in effect on August 20, 1996,
  2. The outstanding principal amount of the loan is not increased, and
  3. The term of the original loan is not extended.

Line 18.   If there are more than three classes of stock, include an attachment with the information required for elements (a) through (f) for each additional class of stock and label the attachment, "Schedule E, line 18 - Additional Classes of Stock."

Line 18(d).   In determining the dividend rate for a class of common stock, use the percentage of the average dividends paid on the class of common stock during the plan year over the average value of the class of common stock during the plan year.

In determining the dividend rate for a class of preferred stock, use the dividend rate stated in the terms of the stock, or if a dividend rate is not stated, use the percentage of the average dividends paid on the class of preferred stock during the plan year over the par value of the class of preferred stock.

2002 Instructions for Schedule G

(Form 5500) Financial Transaction Schedules

General Instructions

Who Must File

Schedule G (Form 5500) must be attached to a Form 5500 filed for a plan, MTIA, 103-12 IE, or GIA to report loans or fixed income obligations in default or determined to be uncollectible as of the end of the plan year, leases in default or classified as uncollectible, and nonexempt transactions. See Schedule H (Form 5500) lines 4b, 4c, and/or 4d.

Check the Schedule G box on the Form 5500 (Part II, line 10b(6)) if a Schedule G is attached to the Form 5500. Multiple Schedule G pages must be attached to the Form 5500 if necessary to report the required information. You can get additional hand print pages by calling 1-800-TAX-FORM (1-800-829-3676) and requesting additional schedules.

The Schedule G consists of three parts. Part I of the Schedule G reports any loans or fixed income obligations in default or determined to be uncollectible as of the end of the plan year. Part II of the Schedule G reports any leases in default or classified as uncollectible. Part III of the Schedule G reports nonexempt transactions.

Specific Instructions

Lines A, B, C, and D.   This information should be the same as reported in Part II of the Form 5500 to which this Schedule G is attached. You may abbreviate the plan name (if necessary) to fit in the space provided.

Part I - Loans or Fixed Income Obligations in Default or Classified as Uncollectible

List all loans or fixed income obligations in default or determined to be uncollectible as of the end of the plan year or the fiscal year of the GIA, MTIA, or 103-12 IE. Include:

  • Obligations where the required payments have not been made by the due date;
  • Fixed income obligations that have matured, but have not been paid, for which it has been determined that payment will not be made; and
  • Loans that were in default even if renegotiated later during the year.

Note.   Identify in element (a) each obligator known to be a party-in-interest to the plan.

Provide, on a separate attachment, an explanation of what steps have been taken or will be taken to collect overdue amounts for each loan listed and label the attachment, Schedule G, Part I - Overdue Loan Explanation.

The due date, payment amount and conditions for determining default in the case of a note or loan are usually contained in the documents establishing the note or loan. A loan is in default when the borrower is unable to pay the obligation upon maturity. Obligations that require periodic repayment can default at any time. Generally loans and fixed income obligations are considered uncollectible when payment has not been made and there is little probability that payment will be made. A fixed income obligation has a fixed maturity date at a specified interest rate.

Do not report in Part I participant loans under an individual account plan with investment experience segregated for each account, that are made in accordance with 29 CFR 2550.408b-1, and that are secured solely by a portion of the participant's vested accrued benefit. Report all other participant loans in default or classified as uncollectible on Part I, and list each such loan individually.

Part II - Leases in Default or Classified as Uncollectible

List any leases in default or classified as uncollectible. A lease is an agreement conveying the right to use property, plant or equipment for a stated period. A lease is in default when the required payment(s) has not been made. An uncollectible lease is one where the required payments have not been made and for which there is little probability that payment will be made. Provide, on a separate attachment, an explanation of what steps have been taken or will be taken to collect overdue amounts for each lease listed and label the attachment Schedule G, Part II - Overdue Lease Explanation.

Part III - Nonexempt Transactions

All nonexempt party-in-interest transactions must be reported, regardless of whether disclosed in the accountant's report, unless the nonexempt transaction is:

  1. Statutorily exempt under Part 4 of Title I of ERISA;
  2. Administratively exempt under ERISA section 408(a);
  3. Exempt under Code sections 4975(c) or 4975(d);
  4. The holding of participant contributions in the employer's general assets for a welfare plan that meets the conditions of ERISA Technical Release 92-01; or
  5. A transaction of a 103-12 IE with parties other than the plan.

Nonexempt transactions with a party-in-interest include any direct or indirect:

  1. Sale or exchange, or lease, of any property between the plan and a party-in-interest.
  2. Lending of money or other extension of credit between the plan and a party-in-interest.
  3. Furnishing of goods, services, or facilities between the plan and a party-in-interest.
  4. Transfer to, or use by or for the benefit of, a party-in-interest, of any income or assets of the plan.
  5. Acquisition, on behalf of the plan, of any employer security or employer real property in violation of Code section 407(a).
  6. Dealing with the assets of the plan for a fiduciary's own interest or own account.
  7. Acting in a fiduciary's individual or any other capacity in any transaction involving the plan on behalf of a party (or represent a party) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries.
  8. Receipt of any consideration for his or her own personal account by a party-in-interest who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or assets of the plan.

Note.   Amounts paid by a participant or beneficiary to an employer and/or withheld by an employer for contribution to the plan are participant contributions that become plan assets as of the earliest date on which such contributions can reasonably be segregated from the employer's general assets (see 29 CFR 2510.3-102). An employer holding these assets after that date commingled with its general assets will have engaged in a prohibited use of plan assets for purposes of the nonexempt transactions described above (see ERISA section 406). See above for reporting by welfare plans that meet the conditions of ERISA Technical Release 92-01.

If you are unsure whether a transaction is exempt or not, you should consult with either the plan's independent qualified public accountant or legal counsel or both.

You may indicate that an application for an administrative exemption is pending.

If the plan is a qualified pension plan and a nonexempt prohibited transaction occurred with respect to a disqualified person, a Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, should be filed with the IRS to pay the excise tax on the transaction.

TAXTIP: The VFCP describes how to apply, the specific transactions covered (which transactions include delinquent participant contributions to pension and welfare plans), and acceptable methods for correcting violations. In addition, applicants that satisfy both the VFCP requirements and the conditions of Prohibited Transaction Exemption (PTE) 2002-51 are eligible for immediate relief from payment of certain prohibited transaction excise taxes for certain corrected transactions. For more information, see 67 Fed. Reg. 15062 and 67 Fed. Reg. 70623 (November 25, 2002). If the conditions of PTE 2002-51 are satisfied, corrected transactions should be treated as exempt under Code section 4975(c) for the purposes of answering Schedule G, Part III. Information about the VFCP is also available on the Internet at www.dol.gov/pwba.

For purposes of this form, party-in-interest is deemed to include a disqualified person. See Code section 4975(e)(2). The term "party-in-interest" means, as to an employee benefit plan:

  1. Any fiduciary (including, but not limited to, any administrator, officer, trustee or custodian), counsel, or employee of the plan;
  2. A person providing services to the plan;
  3. An employer, any of whose employees are covered by the plan;
  4. An employee organization, any of whose members are covered by the plan;
  5. An owner, direct or indirect, of 50% or more of:
    1. the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of a corporation,
    2. the capital interest or the profits interest of a partnership, or
    3. the beneficial interest of a trust or unincorporated enterprise that is an employer or an employee organization described in C or D;
  6. A relative of any individual described in A , B, C, or E;
  7. A corporation, partnership, or trust or estate of which (or in which) 50% or more of:
    1. the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of such corporation,
    2. the capital interest or profits interest of such partnership, or
    3. the beneficial interest of such trust or estate is owned directly or indirectly, or held by, persons described in A, B, C, D, or E;
  8. An employee, officer, director (or an individual having powers or responsibilities similar to those of officers or directors), or a 10% or more shareholder, directly or indirectly, of a person described in B, C, D, E, or G, or of the employee benefit plan; or
  9. A 10% or more (directly or indirectly in capital or profits) partner or joint venturer of a person described in B, C, D, E, or G.

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