Multiple employer PS/401(k)

[Effen]

What if it is a multiple employer DC plan? Assume many unrelated employers adopt the multiple employer plan. They all invest in various pooled accounts.

Would that satisfy the "all the assets of which are available to pay the benefits claim of any eligible employee" requirement because they are pooled accounts, or because each dollar of each fund is allocated to an individual, it should be considered "seperate funding" and therefore each adopting employer should file a 5500?

I'm looking at a multiple employer PS/401(k) plan that each employer picks their own employer ps allocation and matching formula. I'm having trouble determining if they should be filing one 5500 or if each employer should file their own 5500 since all of the money is allocated to individuals?

The Plan document contains an exclusinve benefit rule that states "All contributions made by the Co-sponsor will be used for the exclusive benefit of the Participants who are Employees of the Co-sponsor and will not be used for nor diverted to any other purpose except the payment of the costs maintaining the plan."

It seems to me that each co-sponsor should be filing their own 5500. Agree?

[pmacduff]

We have a PEO Multiple Employer Plan for which we file one 5500 form (approximately 75 - 90 participating employers). Ours doesn't have pooled accounts, per se, but uses a National vendor group annuity product with individual accounts per participant.

Anyway, the plan has been audited by the IRS twice now (if you can believe it) since inception in 2003 and "passed' both audits with flying colors.

Hope this helps.

[Effen]

Thank you, that is helpful. Excuse my ignorance, but what does PEO mean?

[WDIK]

what does PEO mean?

Professional Employer Organization

[pmacduff]

It's actually an employee leasing company that changed the plan back in 2003 from single employer to multiple employer to conform with all of the requirements that the regs set in motion. (I now have to test each Employer separately for everything from ADP/ACP to top heavy etc..) Derrin Watson's 'Who's the Employer' book(s) helped a great deal in understanding all of the issues.

This plan operates very well and I consider us lucky with many of the Multiple Employer Plan horror stories I have heard.

I went to a Multiple Employer seminar at ASPPA however a large focus of that seminar was Defined Benefit Multiple Employer Plans. Thankfully we only have DC Multiple Employer Plans!

[QDROphile]

So how are the DC multiple employer plans with 401(k) features handling securities law registrations?