GUST amendment for 125 plans

[Guest bmurphy]

Can anyone tell me if Section 125 plans need to be amended to incorporate GUST changes effective 1-1-02? Thanks!

[Bob R]

It depends on the provisions of the cafeteria plan. Offhand, I can only think of 2 possible provisions in GUST that would affect a cafeteria plan - the definition of a leased employee and a highly compensated employee. Some cafeteria plans include these definitions and others don't. If a plan includes them, then an amendment would be appropriate (but those were effective in 1997, not 2002).

In 2002, you might have an issue under EGTRRA with respect to the definition of key employee. That is effective in 2002 and should be amended -- if the plan includes the definition of key employee.