Increased Stamp audits (and service credits)

[Guest erisamelissa]

At the May 2006 Multiemployer Audit program sponsored by the IFEBP, Diane Bloom of the IRS stated that stamp programs (and the crediting of service) are high on the IRS's radar for audits.

Is anyone out there currently on the receiving end of such an audit? Any dire predictions for stamp programs in general? Some of us think this is the beginning of the end for stamp programs. Curious to hear what others have heard/seen/know etc.

[JanetM]

Sorry I can't answer your question. Am very curious, what is stamp plan?

[Guest erisamelissa]

Although a bit overgeneralized, a stamp program allows an employer to purchase books of stamps that are redeemed by employees at a later date, who then receive service credit under the plan (can be DB or DC plan). Employers are pre-contributing to the plan, based on assumptions of hours worked during that month (or year).

The IRS appears to be taking the position that the service crediting portion of the program is faulty - that the crediting of service is not timely (and participants are being harmed).

[JanetM]

Interesting plan design. Seem like a round about way of administering a plan. The service credit will always lag, that is nature of DB plan. We sometimes don't have valuations done until late summer and show the updated service credit.

[Effen]

Interesting... where and with who (whom?) are these plans popular? What unions/trades are using them and in what part of the country?

[Guest erisamelissa]

Interesting... where and with who (whom?) are these plans popular? What unions/trades are using them and in what part of the country?

From what I've seen, this is an east coast thing, and mostly used by construction unions. Local 138 of the IUOE uses stamps, and the NY carpenters (local 157) used such a program until 2002.