Cafeteria Plan termination at year end

[bcspace]

A company is considering terminating a Cafeteria Plan a the end of the year because "participation is low". Despite the obvious fact that more should be done to communicate the plan because it is such a great benefit to the ee's and employer let's say they decide to go through with it. Election frustration and pain over the new $2500 max is driving this one so there is not much I can do to alleviate the insanity at the moment.

Is it as simple as amending the plan document, communicating it to the employees, making sure a 5500 is filed (if required in this case), and distributing any left over funds? What are the ramifications if their new plan year begins 1/1? They are certainly outside the 60 day guideline for communications of this type.