W-2 Pension Box

[JanetM]

I am putting this on the 401(k) page because nothing else seems appropriate.

We are running our W-2 programs in test and are reviewing the program. The question is regarding who gets the box checked and what the program looks for.

We check the box for active participants in all plans covered under 401(a) {all of our DC and DB plans}. Do we check the box for those employees who are active under a multi-employer plan - such as those in the Sheet Metal Workers National Penion Fund? The W-2 instructions do not say anything regarding who sponsors the plan.

Any experience or even an educated guess??? A cite or an idea of where to start looking would also help.

[david rigby]

I think this thread should help. Be sure to read to the end. I'm not aware of different rules for employees who are participants in a multi-employer plan.

http://benefitslink.com/boards/index.php?showtopic=10562

[JanetM]

I did read the entire thread - your point at the end is the sticky point.

Last year an employee who is only in the sheet metal workers national pension fund got the box checked. She argued the box should not be checked - had a CPA call me on it too. CPA was Certified Pain in the A** about it - Said the rules are:

"If you are eligible to participate in YOUR EMPLOYERS'S defined benefit plan for the plan year that ends within your tax year, you are covered by the plan. "

This is the same as you have in your post - the key is the employees' employer is not the sponsor of the plan. Sheet metal workers national union is sponsor of plan.

[david rigby]

Interesting. Sorry, I don't have any more info that might help. Perhaps a question to the IRS might help, including the specific issue mentioned in your last post.

[Belgarath]

Interesting thread. Pax, I read the thread you referred to. I think the answer to your final observation in that prior thread can be found in 1.219-2(B)(1), ..."an individual is an active participant in a defined benefit plan if for any portion of the plan year ending with or within such individual's taxable year he is not excluded under the eligibility provisions of the plan. An individual is not an active participant in a particular taxable year merely because the individual meets the plan's eligibility requirements during a plan year beginning in that particular taxable year but ending in a later taxable year of the individual." So assuming no previous participation, in your example, he would not be a participant for 1999, but would be for 2000.

JanetM - I read the regulation to say AN employer, not YOUR EMPLOYER's as the CPA was claiming. Again, take a look at 1.219-2(B)(2).

[david rigby]

Also look at IRC 219(g), especially subsection (5) which defines "active participant".

I think a paraphrase of 219(g) is that this special limitation applies to any qualified plan. That would include participation in a multi-employer plan, whether or not this particular employer is making a contribution on behalf of this particular employee.