Two companies incorrectly included in one plan. Form 5500 impact?

[Guest Factster]

Two companies were incorrectly considered to be a controlled group (Plan X) and therefore one plan was established. The plan was established in 1998. The plan is being split in 2002, Plan X and Plan Y, and was wondering if amended 5500s for Plan X and late 5500s for Plan Y are necessary, or what is the proper way to handle this?

[E as in ERISA]

It sounds like there is only one plan -- but that it is a multiple employer plan.

Before 1999 one Form 5500 was completed, with the employers attaching Forms 5500-C/R to provide coverage info by entity. After 1998 one Form 5500 is completed, with multiple Schedule Ts to provide coverage info by entity.

So it sounds like you need amended returns.

[E as in ERISA]

P.S. You may have a variety of other issues such as whether both companies officially adopted the plan, whether the appropriate type of document was used, whether the determination letter if any was properly applied for, whether testing was performed accurately, etc.

[Guest Factster]

No, this is not a multiple employer. The employer's were incorrectly advised that they were a controlled ownerhip group because of misunderstanding of attribution rules. Therfore, one plan was setup and employees from both companies were covered under the plan.

[Blinky the 3-eyed Fish]

Even if you have a controlled group, it is very likely that the other members of the controlled group would have to adopt the plan in order for their employees to be in the plan. I am sure there are some documents with language that would automatically cover all employees of a controlled group, but I can't recall seeing one.

That being said, I assume the two companies adopted the plan and, therefore, you DO have a multiple employer plan.