Effective plan date question

[Guest LVanSteeter]

A plan has been in effect since 1982. All divisions file as single employers! In 2001, a division has adopted the plan and will be filing its first return.

What is the effective plan date for the 5500? 1982 when the plan was begun or 2001 when it was adopted?

Many thanks!

[david rigby]

A better first question is how many 5500 filings there should be.

- On what basis is the current process of filing multiple forms?

- What kind of plan is this?

- What is the actual relationship of the "divisions", to each other? to any other entity (such as a corporation)?

- Any collective bargaining agreements involved?

[Guest LVanSteeter]

1-The plan has been filing individual 5500 for each division as single employer since its inception (50+ divisions)

2-Plan is a 401k that was just amended & restated from MP to PS

3-Assets for each division is kept separate and cannot be used by any other division for any reason.

4-No collective bargaining

[maverick]

I have a client in a similar situation so I'd be interested in the answer re: date.

My client has purchased several competitors over the past few years, and maintained the 401k plans of the acquired firms. As in LVS' scenario, each "division" filed its own 5500. As of 1/1/02 the client established a new corporation rolling all the "divisions" into one entity.

Another question: Can the highly comps in the new organization defer 5% in 2002 (3% nhce for new plan plus 2%) since it's a new plan (new employer ID and plan ID #)?

Thanks. Maverick

[david rigby]

Perhaps I'm missing something, but from the facts stated by LVanSteeter, there is only one plan. If that is the case, then there should be only one 5500. However, also stated is that assets are "kept separate". So maybe there is more than one plan. Define the basics first. The ball is back to you.

Maverick has a different scenario that implies different divisions have different plans; thus, multiple 5500s.

[Guest LVanSteeter]

Believe me I have checked more times than you can imagine!

Each plan files separately as a single employer. At this point, I am leaning towards the date that the plan document was signed. (Plan document is the same EXCEPT for the employer name, which is changed for each division)

[david rigby]

Hold on here. In your first post, you state "a plan". In your most recent post, you state "each plan". Is it a single plan, or many?

The answer to that question is not affected by how the divisions have filed 5500s in the past. It must be answered before concern for your original question. If a single plan, then file only one. If multiple plans, the addition of a new division will either create a new plan (hence a new effective date) or it will be included in one of the existing plans (in which case, the new division does not file anything).

[R. Butler]

I'm not sure I agree that only one 5500 is required, even if this one Plan. The instructions state that "a separate Form 5500 with box A(2) checked, must be filed for each employer participating in a plan or program of benefits in which the funds attributable to each employer are available to pay benefits only for that employer's employees, even if the plan is maintained by a controlled group."

I agree with LVanSteeter's inclination to go with the initial date of the Plan, not the date it was adopted by the particular division. I haven't seen any real guidance on the issue, but it just makes sense to put the initial effective date. Regardless of how many 5500's you are filing it still is the same Plan.