HELP!

[Guest Kristine]

Okay, well I misspoke earlier and what the exact problem is is that both the Plan Doc and SPD say that participants need to submit claims within 75 days,however, the employees were given a flyer that stated that they had 90 days to submit claims. Now we have participants turning in claims after the 75 days and saying they have 90 dyas to submit accoring to the information they were given. We don't know if we should update the PD to reflect the 90 days and have the client back date the document to 12/31/05 or not. What do you think???

[namealreadyinuse]

You should probably just treat the memo as a plan amendment and formalize it or change it back now for next year. You could also amend the plan document now, effective 12/31/05 because retroactive effective dates for cafeteria plans aren't really a huge issue where you have some communication of the change. Treat everyone fairly - let people facing forfeiture know about the extended date.

[jmor99]

This comes under the heading of an administrative error. You could go ahead and honor the 90 day period this time but you would want to prepare and file a Plan of Correction to be filed with your 125 documents to CYA in the event of an audit. The Plan of Correction follows an IRS acceptable format.