Can an ERISA plan become non-ERISA?

[Flyboyjohn]

First 10 years plan covered owner and common law employees.

10 years ago all common law employees terminate employment and are paid out leaving only the owner with a balance.

Now preparing delinquent 5500s for last 10 years and question is has the plan become a "one-participant" non-ERISA plan eligible to file 5500EZ or does it remain an ERISA plan and need to (able to) file 5500SFs under DFVC?

[Buffys Redrum]

If the plan is an owner-only plan all year, the plan is eligible for the Form 5500EZ filing (making a mild assumption assets are over $250,000). For the first 10 years, this particular plan would not be 5500EZ eligible.

[Peter Gulia]

Both the Form 5500 instruction about a "one-participant" plan and 29 C.F.R. 2510.3-3 speak in the present tense.

For the report of the last year that had a non-owner participant, I would ask EBSA's Office of the Chief Accountant what code or mark the computer wants for the system to know not to expect Form 5500 in later years.

[Flyboyjohn]

Thanks for the replies.

I need to go back and read Patterson v. Shumate (the landmark SCOTUS case that talked about bankruptcy protection for "ERISA qualified" plans) because I recall that the debtor in question was the owner of the company and had become the sole participant and the opposing counsel argued (unsuccessfully that the plan was no longer ERISA qualified. SCOTUS seemed to indicate that "once ERISA qualified, always ERISA qualified".

[Peter Gulia]

When you re-read Justice Blackmun's opinion of the Court, I think you'll find a few points:

The holding is that ERISA can be "applicable non-bankruptcy law" within the meaning of a then-relevant Bankruptcy Code section.

The Court did not expressly find that the Coleman Furniture Corporation Pension Plan was an ERISA-governed plan (or that it was not). Nor was such a fact necessary to the reasoning of the Court's holding.

The opinion's statement of fact does not say that Joseph B. Shumate Jr. ever was a shareholder of Coleman Furniture Corporation.

Mr. Shumate was the last participant of the pension plan because the bankruptcy trustee of Coleman Furniture Corporation decided to pay all participants except Shumate. (The litigation that made its way through four layers of proceedings began as an adversary proceeding of Shumate's bankruptcy trustee suing Coleman Furniture Corporation's bankruptcy trustee.)