404(a)(5) and plans that cover only owners

[12AX7]

DC plan covers only two owners (S Corp.) Plan uses DIAs. Is the plan subject to the disclosure regs? I had heard in a webcast that the regs are not applicable to plans covering only owners, but perhaps I'm not seeing that in the regs with respect to this type of situation. Thanks.

[ETA Consulting LLC]

You would have to be subject to ERISA in order to be subject to the ERISA 404(a)(5) regs.

Good Luck!

[BG5150]

I don't think the plan is covered under ERISA, so no disclosures would be needed.

[12AX7]

I think perhpas the confusion in my mind is that the plan would not initially have the Title 1 exception to filing a Form 5500. But, perhpas that makes no difference.

[austin3515]

I think it is an ERISA plan. Corporations are "owner only" plans if they cover only employees who own more than 50%. Anyway, check the fine print. Does it say "at least 50%" or "more than 50%." I don't remember, but I know you're right on the line.

[12AX7]

Austin, are you referring to the instructions on Form 5500-EZ or something else?

[austin3515]

5500-EZ, but I was wrong. You have to have one 100% owner of a corporation to be an owner only plan. If you were a partnerhsip, different answer - you can have any number of partners. But for a corp. you're only allowed one owner.

See " Who Must File Form 5500-EZ" in here:

http://www.irs.gov/pub/irs-pdf/i5500ez.pdf

[12AX7]

Thanks Austin, I was aware of that and this is where I'm confused. A One-Person plan covering a C or S Corp owner is not an ERISA plan. A Plan that only covers 2 C or S Corp owners is an ERISA plan?

[austin3515]

Yes (you actually were not confused at all!)