Reporting reversion on Form 5500 - multiemployer plan

[Guest cease]

I am reviewing a Form 5500 for a multiemployer holiday fund that terminated. At the termination, excess assets were reverted back to the participating employers. On the Schedule H, where should the reversion amount go?

[Guest HarveyC]

I believe that asset reversions to contributing employers are not permitted in the case of multiemployer plan terminations.

Refer to Pension and Welfare Benefits Administration Opinion Letter 94-39A, November 28, 1994.

[Guest cease]

Thanks HarveyC. I reviewed the reference you provided and it refers to a multiemployer pension plan. I have a welfare plan and after some more digging looked at ERISA 403(d)(2) and see that there is a difference between pension and welfare plans.

I need to get my hands on a copy of the document. I am back to square one if the plan instructs the adminstrator to refund monies to the participating employers and I still won't know where to put this refund on the 5500.

Any additional thoughts?

[KJohnson]

I am not sure you are out of the woods. If you are dealing with a mutliemployer fund in all liklihood you are dealing with a VEBA. (Although I am not exactly sure what a "holdiay fund" is). I believe there would be a 100% excise tax on any reversion of VEBA assets to an employer. I don't have the excise tax cite handy, but look at 1.501©(9)-4 regarding prohibited inurement.

[david rigby]

DOL Advisory Opinons can be found here:

http://www.dol.gov/ebsa/regs/aos/main.html#1994

[Guest cease]

Thanks once again for the responses. I was able to find the DOL Advisory Opinion which led me to ERISA 403(d)(2). I also reviewed 1.501©(9)-4(d) which discusses termination of the plan or dissolution of the association.

The additional information that I was able to find indicates that this "holiday" fund was established to provide holiday benefits for workers pursuant to the terms of a a provision in a collective bargaining agreement. It does not appear to be a VEBA, but a trsut fund was established. A reserve had been establish to pay for benefits to workers where contributing employers had gone out of business and to pay for future administration costs. The remaining assets in the fund represent this reserve, which does not appear to be attributable to certain workers.

It would appear that the reversion is attributable to this reserve. If there is an excise tax, then so be it. I am still not sure where this reversion should be shown on the Schedule H of the Form 5500, so that the assets balance to 0.

As always, I look forward to any additional feedback.

Thanks.