Form 5500 - New Multiple Employer Reporting

[Gruegen]

The new Form 5500 rules impose additional reporting disclosures for multiple-employer plans starting in 2014. The DOL rules use the term "participating employer." However, I am unclear how this term should be interpreted in the context of a multiple-employer plan that has both related (part of a 414(b)/© controlled group) participating employers and unrelated (not part of a 414(b)/© controlled group) participating employers.

For example, suppose there are 3 participating employers that have employees covered in a multiple-employer plan in 2014 - - ABC Company, DEF Company and XYZ Company. ABC Company owns 100% of DEF Company. ABC Company owns 50% of XYZ Company and the other 50% is owned by some unrelated individual. Therefore, ABC Company and DEF Company are related companies. XYZ Company is unrelated.

How would the Form 5500 schedule look:

Option #1

Under this interpretation, each participating employer (both related and unrelated) are listed.

ABC Company 12-3456789 – 50% (proportion of contributions)

DEF Company 55-5555555 – 20% (proportion of contributions)

XYZ Company 98-7654321 – 30% (proportion of contributions)

Option #2

Under this interpretation, only unrelated participating employers are listed.

ABC Company 12-3456789 – 70% (proportion of contributions)

XYZ Company 98-7654321 – 30% (proportion of contributions)

Or is there another manner of disclosure?

[rcline46]

All members of a controlled group are treated as one (single) employer and if not in a multiple employer plan, are not subject to the rules. Therefore my conclusion is that it is STILL a single employer for the new reporting.

In your example, XYZ is a related employer, just not part of the controlled group (and maybe an ASG), and so XYZ is the company making it a multiple employer plan, and so only ABC and XYZ need to be reported.

So goes the interpretation we will be using.