ERISA 204(h) Notice and 1 life plans

[AndyH]

Is the 15 day notice required in the case of an incorporated 1 life DB plan that employs only the owner?

Clearly an "owner-employee" plan is exempt but our legal people are hesitant to extend this to a corporation due to some concern over some part of regulation 2510.3-3(b).

Has anybody looked at this?

I know the EOB says that plans eligible for 5500-EZ are exempt and the EZ instructions clearly allow such filing by a 1 life owner employee corporation so that is one bullet in my gun. I'm looking for more ammunition. Thanks for any help.

[David MacLennan]

What part of the regs are they concerned about? Paragraph c(1) clearly states that where a corporation is wholly owned by the individual, or the individual and the spouse, then they are not employees under Title I.

[AndyH]

The reservation is the specific reference in Q&A 3 which which refers to employees "as described in 2510.3-3(b)"

And 3(b) describes plans without employees and gives examples of unincorporated businesses and keogh plans.

Not until you get to 3© does this get extended to "...or business, whether incorporated or unincorporated"

Clearly this is a conservative interpretation but it is from an experienced ERISA attorney and I am trying to overcome it with facts.

[David MacLennan]

Paragraph c states that it applies to the entire section. But I see your point now - the ERISA attorney is saying the Q&A 3 refers to paragraph b which must be viewed apart from any other paragraphs. That is not just conservative, in my opinion it goes to being unreasonable in the extreme. Ammunition: "if you need to justify your existence, please do it in some other way" (just kidding - everyone is entitled to their opinion!).

[AndyH]

That is not just conservative, in my opinion it goes to being unreasonable in the extreme.

A lesser person I may have said that to!

Thank you for the comments and the sympathetic ear.