flex credits as plan assets

[Guest clk]

Are Flex Credits that an Employer provides under a cafeteria plan considered to be plan assets under ERISA if employees have the option to cash out the credits?

[papogi]

Based on my understanding of DOL regs, I would say no. Even though the flex credits are from the employer, if there is a cash option, the credits become employee salary.

[Guest clk]

Thanks for your response. If the credits are the equivalent of salary though, and are then used to purchase benefits, does that make them plan assets under the DOL Plan asset Reg?

[papogi]

You are correct. It depends on what aspect you are looking at. They are plan assets for trust purposes, but they are not plan assets for most reporting purposes.