Silly ERISA vs. 125 plan question

[Guest Sam Trager]

I work for a county govenment that is not subject to ERISA. We do have a 125 plan in place and have a consultant telling me that we need to publish an SPD. I always thought this was an ERISA requirement and have never done one before. SO...whats the deal? Is an SPD required for 125 compliance or for ERISA compliance.:confused:

[rcline46]

ERISA and 125 plans are essentially not related. There is a separate requirement under the 125 (and related code sections) to communicate the plan(s) to the employees. To make life easy this communication is called a Summary Plan Description.

[Joe Priselac]

To expand on the previous reply, A Cafeteria plan under Code section 125 is considered a statuatory fringe benefit. Which means that your employer, the county government has to comply with the requirements set forth in the In ternal revenue Code. In Section 125(d) It states that the "the term cafeteria plan means a written plan..." It is clear that to have a valid plan your employer must have a written plan document. There is a difference between a plan document and a summary plan description. Distribution of a summary plan description is typically an ERISA requirement to which your county is not subject. It could be argued that the county could get by with just a plan document, but from a practical point of view a written summary of the plan would be an effective way to communicate the provisions of the cafeteria plan to the employees. Why have a benefit that no one knows about or is misunderstood?

[GBurns]

Aside from the issue of an SPD for the 125 plan, do you give an SPD for the underlying qualified benefits?