5500 with fewer than 100 participants

[bcspace]

Can someone expound a bit on what, if anything, makes it necessary to file a 5500 for a welfare benefit plan for a company with less than 100 participants? Specifically regarding the instructions on page four of the 5500 instructions under the heading "Do Not File A Form 5500 For A Welfare Benefit Plan That Is Any of the Following:"

Is it really just as simple as there is a Cafeteria Plan, there are fewer than 100 participants, therefore we don't need to file a 5500? I see some potentional pitfalls in the instructions regarding the regulations, code, and a technical release that I don't fully understand.

Thanks

[J Simmons]

You also must not have a separate fund that use for contributions and dispersements from the cafeteria plan.

[bcspace]

You also must not have a separate fund that use for contributions and dispersements from the cafeteria plan.

So a company can have a separate area on the ledger to handle these transactions but not an actual bank account they deposit contributions to else they trigger the 5500 filing requirement?

[J Simmons]

I prefer the separate area on the ledger and then payment out of the ER's general bank account, but you can do the separate bank account just for cafteria plan benefits--but be careful not to designate it in any way as relating to the cafeteria plan and do not communicate to the employees that the ER has the separate fund and on balance sheets etc. list the balance in the separate account as a general asset of the ER. Otherwise, you might incidentally create a trust fund as to which the EEs would have priority claims over the general creditors of the ER. If so, then you have lost the exemption from the ERISA trust and Form 5500 requirements.