Multiemployer Fund as Sponsor of Cafeteria Plan

[Chaz]

I asked the following question in the Cafeteria Plan board but have not received a definitive response, so I figured I'd try here:

Can a multiemployer fund sponsor a cafeteria plan for the benefit of the employees of its member employers? Q-3 of the proposed 125 regulations seem to indicate not because a "cafeteria plan is a plan maintained by an employer for the benefit of its employees." Is there any way that a cafeteria plan (with premium payment, FSA, and DCAP features) can be structured to be located at the fund level and with only one Form 5500 filing for the FSA feature? Any suggestions are welcome.

[Guest jdsmith]

I think the question is whether an employee can reduce his income, send that amount to the Union sponsored cafeteria plan, and still be able to exclude the the amount from income.

Wouldn't a salary reduction agreement that is not made pursuant to a Section 125 arrangement violate the constructive receipt doctrine?

What I am saying is that it doesn't matter who sponsors the FSA if you can't get pre-tax dollars into it.

[Bill Ecklund]

A multiemployer plan can sponsor a cafeteria plan, if it has been bargained for and is in the labor agreement.

[GBurns]

It seems that there might be some difference between the definitions of the term "sponsor".