S/E multi-er plans

[Guest chris4013]

I am new to multi-er issues, but I have a quick question.

My wife and I are Self employed. Are there any issues preventing us from forming a multi-er plan?

Would it matter who the plan sponsor is for 5500 filing?

[GBurns]

Does your state even allow MEWAs?

[mbozek]

Do you work in the same business or do you maintain separate businesses? Multi employer plans are maintained by unions not self employed person. You can sponsor a SIMPLE, SEP or self- employed qualified plan for self employment income.

[GBurns]

Multiple employer plans, whether MEWAs or not , are maintained by multiple employers, whether through unions or not.

Multi-employer plans are different to multiple employer plans and while usually set up through unions or subject to a CBA, this is not always so.

chris4013,

Please clarify what type of plan you really mean. Accuracy of decsription will get you better answers.

[Guest chris4013]

Let me tell you what I am trying to do, and maybe you can help me find the correct vehicle.

I want to setup one trust account that my wife's business, and mine would be able to fund, requiring just one 5500. We are both self employed.

Is this possible?

[mbozek]

First if you each have no employees there is no annual reporting until a plan has 100k in assets. Reporting can be avoided altogether if you each establish a SEP plan. You should check the instructions to the 5500 forms to see how multiple plans can be filed under one trust.

[GBurns]

One thing seems missing. What benefits are you desiring to provide?

[Guest chris4013]

We want to maximize the allocation, so I would figure a 25% profit sharing contribution.

I thought a SEP was 15%.

[Guest Keith N]

I think because of the stock attribution rules you would both be deemed to own 100% of each other’s business. Because of this, I think you would be considered a controlled group and therefore you could both adopt the same plan.

I would strongly recommend you find a competent ERISA attorney or benefit consultant to help you with this. This is not the type of question that you can rely on a message board for a perfect answer. There are too many variables.

If it is not done correctly, the filing of a 5500 will be the least of your worries!

[WDIK]

If neither spouse is an employee or participates in the management of the other spouse's business, I think that the attribution rules to not apply per IRC Section 1563(e)(5).

[mbozek]

Spousal attribution of separate business interest for benefits issues under the controlled group rules is regulated under reg. 1.414©-4(b)(5)

[WDIK]

Mbozek,

Thanks for the catch. That will teach me to trust citations from reference material.

[GBurns]

It is not the cite that was the problem it was the relevance to this issue.

1563 is good for some tax issues.

414 is good for profit sharing etc.

318 and 1372 are good for cafeteria plans and fringe benefits.

Any cite given by anyone, even reference material, should be read and placed in context and relevancy.