Prevailing Wage Money Purchase Plan

[Guest slugn]

We have a client with a prevailing money purchase plan with us. In 2007 they started a prevailing wage plan with a new provider and did not notify us until January 2008. They sent their 2007 prevailing wage contributions to the new provider. The prevailing wage contributions are the only contributions to the plan. Both providers filed the Form 5500 for their respective plan. As of this date, they have not terminated our plan nor rolled the assets from our plan into the plan wtih the new provider.

Does anyone know what kind of problems this could present. Should our plan have been amended to a zero contribution prior to them starting the new plan?

Thanks for your assistance.

[ERISAnut]

I think the simpliest way to explain it would be the following:

Each plan would:

1) Have One Plan document governing the plan

2) Complete one form 5500 for year end

3) Have as many trust "accounts" and third party administrators as the client decides to hire.

Number 3 will not affect 1 & 2. So, if two Forms 5500 were completed for the 'same plan', then you would need to do an amended return which provides aggregate figures from both trust accounts. The other provider would have likely included a beginning balance of zero on their Form 5500.

Simply put, you have to find out what is going on and get it consistent with items 1, 2 & 3 above.

Hope this helps.