Schedule R - 2005

[Guest jae3207]

I know this has been discussed, but I don't see any clear cut answers to this question:

If an employer utilized the 3 yr testing cycle for coverage testing in 2004, how do they report coverage testing compliance on the 2005 Schedule R (assuming they also must file one and do not meet any of the other exemptions listed in the Instructions)?

[Mike Preston]

What are my choices?

[Guest jae3207]

Ratio or Average Benefits Test.

Plan sponsor passed coverage using the average benefits test in year one and wants to rely on those coverage results for 2005 and 2006. There is some confusion as to whether they must rerun coverage for 2005, since the Schedule R does not provide the use of Rev Proc 93-42 as an exception from reporting purposes.

[Blinky the 3-eyed Fish]

The Schedule is not dictating a change in the coverage testing requirements, just how they are reported. If you are relying on the 3-year cycle and you passed the average benefits test in year 1, well then you passed the average benefits test in years 2 and 3. That is what you report on the Sch R for those years.

In the past you just didn't have to report year 2 and 3 on the T.

[Mike Preston]

What Blinky said.

[Guest jae3207]

That is exactly what I thought, I just need confirmation from the "experts".

Thanks