Schedule C, line 2d - who is a party-in-interest?

[Guest LAnderson]

Ok - we're having a debate over the relationship of service providers to the plan. Are all service providers (i.e. recordkeepers, investment managers, trustees, etc.) considered to be parties-in-interest for purposes of Schedule C, line 2d?

Under ERISA Section 3(14), party-in-interest is defined in part as:

1. Any fiduciary (included but not limited to, any administrator, officer, trustee, or custodian), counsel or employee of the plan.

2. A person providing services to the plan.

In #2, does a "person" mean an actual person, or does it also include entities?

Any thoughts would be greatly appreciated!

Laura

[Guest anagpal]

This seems to be more of tricky rather than a confucius debate. As per 5500 instructions provided by DOL,

"Employees of a business entity (e.g., corporation, partnership, etc.), other than the plan sponsor, who provided services to the plan"

This means that a group of persons providing services to a plan under a name of of an entity can be reported in Schedule C with the name of that entity and its EIN.

Please correct if I am wrong !!!

Amit Nagpal

[Ron Snyder]

A business entity is most definitely a "person" for purposes of such laws.

Amit-You are wrong. Go back and reread the instructions. They say to report any compensation of $5,000 or more except:

"1. Employees of the plan * * * less than $1,000 per month * * *;

2. Employees of the plan sponsor who did not receive * * * compensation from the plan;

3. Employees of a business entity (e.g., corporation, partnership, etc.), other than the plan sponsor, who provided services to the plan; or

4. Persons whose only compensation * * * consists of insurance fees and commissions * * *."

[Guest LAnderson]

That's what we were thinking as well, vebaguru. I guess what we're really driving at is how we list their relationship to the plan on line 2d. Do we go by the ERISA definition, so that anyone with fiduciary responsibility is a party-in-interest (such as an investment manager)? And if there is a multiple relationship (ex- the president of the company could be listed as "president" or "party-in-interest"), which do we list? Are we required to disclose the party-in-interest relationship?

We may be making a mountain out of a molehill, but I'm trying to make sure we're prepping our returns consistently. On most of the 5500s I've prepped, we've just listed the relationship as "none," but are re-thinking whether or not this is correct.

Thanks!

[Guest 5500]

My view on this:

They are asking you to describe the individual or entity's relationship to the employer, the employee organization, or to a party-in-interest, not whether they are a party-in-interest; which just about any service provider is.

In other words, if the plan was making payments to an another entity owned by the TPA, they would want this relationship disclosed.

Most payments to outside service providers would be listed as "none" under (d), unless there was some relationship between that provider and the employer, employee organization, or another party-in-interest.