Form 5500 Schedule T coverage

[Guest SJPrince]

Schedule T asks for proof that a plan meets the coverage requirements. It asks that 401(m) contributions/eligibility be disaggregated from 401(k) etc. This means that Voluntary After-Tax Employee contributions and matching contributions are part of the 401(m) testing portion for coverage.

What if you have different eligibility requirements for your voluntary after tax and your matching? Or you could have 2 different kinds of matching, credited and made throughout the year as well as one that is made at year end, but you could have different (non-failsafe coverage) eligibility for both types of matching.

Now having noted this... my dilemma is I look at the Schedule T box and it only has room for one answer, it does not take into account the different eligibilities for differing types of 401(m) contributions. How do I decide what to disclose here? If one of the contribution types meets coverage fail safe eligibility then is that enough? or is there going to be a problem where one of the other 401(m) contribution types doesn't meet coverage? and if so, how do I disclose this and know WHICH to disclose coverage figures for?

Thanks for your help.

Samantha Prince

[Tom Poje]

The schedule T only looks at coverage, and my understanding is that you look at the 'item' with the lowest eligibility requirements.

So you should have enough room. the only time you might not have enough room if you disgregate your testing into 'otherwise excludable' and 'met statutory exclusions'.

HOWEVER, all that being said

I believe in the case of two different matches you will have a BRF issue..e.g. the right to each rate of match.

But that is a different issue.

Remember, you don't include your ADP results anywhere on the 5500, so not including the BRF results is the same type of deal.