Poll on multiple employer plan 5500 filing rules

[John A]

http://www.benefitslink.com/cgi-bin/qa.cgi...d=184&mode=read

How many of you agree with the interpretation of the multiple employer plan rules given in the thread above (allocations are not what count, separate trusts are what count)?

How many of you would disagree and would be one of the "many practitioners read that to say" (allocations are what count, not separate trusts)?

[Guest Tbrown]

I would agree that the allocation doesn't matter. If the funds are available to pay benefits for all, then I believe you have one filing. If the funds are invested within the same trust, then that could be interpreted as being available to pay all claims (even if you have individual participant accounts). We have a situation here where one company is participating in another's plan and the investments are in 2 different contracts but are in the same trust. So far (subject to change if we can ever get a difinitive answer) our position is that we have one trust and therefore one 5500 filing.

[Guest Derrin Watson]

Pardon me for stepping in here, but it might be well to tell a story or two about how I got to Q&A 184.

I know a lot about controlled groups leased employees. I don't pretend to know as much about 5500s as I do about controlled groups and leased employees, but I do know a fair amount. Why? Because I've been teaching seminars about 5500s for Corbel for the last two years, and I've done the study I've needed to do to be able to teach it effectively.

One of the issues on this year's presentation is the point we are dealing with in that Q&A. Corbel looks at it from the standpoint of an affiliated service group, rather than a multiple employer plan, but it is the same point. The answer that we've given is the answer I've given in the Q&A. And when I say "we" I include people whose opinions I respect greatly, such as Valeri Stevens (who knows 5500 forms as well as anyone), Stephen Forbes, and Craig Hoffman, Warren Marshall and Bill Whitman.

So, with that, I felt fairly comfortable in giving the answer I gave. Of course, I had had discussions with Janice Wegesin years earlier about the issue, who had explained to me that this was the position of the DOL. In other words, this isn't something I've cooked up. I've given the answer that I believe accurately states the DOL's position on the issue.

Valeri Stevens was kind enough to look at my response. She noted some changes I incorporated into the Q&A 184, but agreed with my reasoning. After seeing this poll, I double checked with Janice Wegesin, author of the 5500 Preparer's Manual (alias the 5500 Bible) and the brains behind the form 5500 help site, who confirmed what I've written.

So, frankly, I don't think this issue is one that lends itself to polling. I'm pleased to see that those who have responded thus far have agreed with me, but polls don't change what the DOL's position is.

I know that there is (unfortunately) disagreement on this issue because as I have been teaching the 5500 classes, in any large group there would be one person who would -- sometimes vehemently -- defend the accounting allocation viewpoint. The question that was the genesis of Q&A 184 certainly took that viewpoint, and it was to that stance that I was responding. But based on the discussions I've had, I feel confident about my answers.