Cafeteria

[Guest eruiz]

I have a client whose original Flex plan runs 7/01 -6/30 and wants to know if they can change to a calander year plan year 1/01 - 12/31, how can i do this?

I know they can amend the plan but can I amend the 7/01 plan year to a short plan year thru 12/31 and then start a new plan year commencing 1/01.

Please advise

[Guest avsnow]

The State of Georgia did this very thing. In 2005, we moved from a fiscal year plan year to a calendar year. We had a short plan year from July 1, 2005 - December 31, 2005 and began the normal 12 month plan year on January 1, 2006.

[LRDG]

A 07/01/08 through 12/31/08 short plan year, with a calancer plan year of 01/01/09-12/31/09.

Terminating the 07/01/07 through 06/31/08 plan year will be impossible to do without compromising irrevocabe elections/agreement employees entered into for a 12 month non-calendar plan year, and/or encountering compliance problems.

[Mary C]

We did the reverse in 2006. We announced in December 2005 before the sign up for 2006 that it would be for a short year from January 1 to June 30. We also lowered the maximum allowed to be contributed by half for the short year. Communication is key in changing the plan year because the participants who are used to the old way may not read closely or notice that the new year is for a shortened time period.

[Jacmo]

The key thing is, as indicated by ldrg, that you must do it before the new plan year starts.