When will MEPs start filing separate 5500s?

[Flyboyjohn]

When the DOL turned open MEPs into separate plans for 5500 and audit purposes last May they didn't say "when" their position became effective (retroactive, starting with 2011 or 2012 or other?)

Does anybody know what any of the big open MEPs are doing?

Thanks

[Belgarath]

As a technical matter, I think the requirement has always been there. The AO didn't really change the status of some of these MEP plans as individual plans, based upon prior DOL guidance - just followed earlier opinions with some additional clarification, IMHO. See, for example, AO 83-15A and 81-73A. One could debate this, but at this point, I don't think it matters much...

Lacking specific guidance, one can only hope that the DOL is not out for blood on this, which they don't appear to be. But whether they will offer some relief for years prior to, say, 2012 or 2011, is anyone's guess. They might choose to take the approach that these will have to be corrected under DFVC. It almost seems like if they were planning to offer a blanket amnesty, they would have done so already, but I can't pretend to be able to understand the collective thought process of the DOL's regulatory drafters.

I've heard nothing on how this is being handled in real life situations.

[Bill Presson]

At the ASPPA Benefits Conference of the South last May, Scott Albert (with the Chief Accountant's office of the DOL) said that he expected plans to file 5500's for 2011 since they had clarified in plenty of time for them to meet the 10/15 extended deadline.

Now that's not official, but the 5500 is created in his office, so I think that holds some weight.

[MoJo]

Several contacts I have who are "connected" indicated last September that the DOL was going to publish "further guidance" - expected by the end of the year (2012) that would provide a "safe harbor" or "amnesty" for non-filers provided the past 3 years worth of 5500s were filed. That guidance hasn't materialized.

In addition, my contacts indicated that the guidance would "clarify" what "relationship" between the separate employers would be sufficient so that it truly was not an impermissable "open" MEP - but would be a permitted MEP. The discussion (on a panel at PANC on which I participated) centered around a percentage of cross ownership (but not a controlled group or affiliated service group) where a MEP would be permitted. An attorney from Groom indicated that if there was 49% "cross ownership" (the owner of one company owns 49% of the other), the two employers would be sufficiently related for a legitimate MEP. As far down as 25% cross ownership, he was comfortable, and approaching 20% he started to hedge.

The organization I work with (a consulting TPA) has a fair number of situations like that (cross owners, but not CG's) and we have gotten "cautious" about continuing MEPs - pending further guidance. That said - absent a legimiate MEP arrangement (and the cost efficiencies), many of those current clients would not continue being plan sponsors at all.

[Flyboyjohn]

I've learned from one of the major open MEP players that they intend to start filing separate 5500s/audits effective with the 2012 filings