Another Schedule C Question

[austin3515]

From the DOL's Schedule C Q&A Q25: If a service provider discloses a formula used to determine its indirect compensation, is the plan administrator required to calculate or estimate dollar amounts from the formula for purposes of Schedule C reporting (to the extent that compensation described by a formula is not eligible indirect compensation)?

No. Element (g) on Line 2 of Part I of Schedule C requires the plan administrator to enter the “total of all indirect compensation that is not eligible indirect compensation” and Element © on Line 3 of Part I of Schedule C states that the plan administrator should “Enter amount of indirect compensation.” Where a plan administrator receives a formula from a service provider for amounts reportable on Line 2, the plan administrator may enter “0” if that is the only indirect compensation reportable in element (g) on Line 2. The plan administrator must check “yes” in element (h) of Line 2, and attach a statement describing the formula(s) that is labeled “Schedule C, Line 2(h) formula description.” Where a plan administrator receives a formula from a service provider for amounts reportable on Line 3, the plan administrator may enter “0” if that is the only indirect compensation reportable in element © on Line 3. The plan administrator must include in element (e) on Line 3, a description of the formula(s).

My Question

With respect to the bolded paragraph, has anyone seen such an attachment? Great West is indicating that their comp is NOT eligible indirect on their schedule C report AND that they provided a formula. Has anyone included the attachment described above?

Also, why is GW saying that it is not eligible indirect? I had heard that the 408b2 should have made everything eligible indirect? Perhaps it is, and they just did not reprogram their systems?

[K2retire]

A couple of thoughts about Great-West. The Schedule C section of their annual plan summary was initially incorrect for most of our plans and they had to generate new ones. If the plan is on their PNP site (for non-profits), rather than on Partnerlink, they do not generate a Schedule C report.

[austin3515]

Preparing a presentation on 5500's and curious to know if anyone has seen this?