Controlled Groups and the new 5500

[Guest Rudy]

Scenario: Two-corporation controlled group 401k plan with match that is 100% vested. Each employer is contributing to the accounts of their employees only.

Question: To properly complete form 5500, should box A(2) be marked (single-employer plan), and a separate 5500 completed for each member of the controlled group? If so, are assets, participant count etc. reported in total on each form, or divided and reported on the respective member form?

This is my understanding of the instructions (page 10). It seems very illogical. Any suggestions will be appreciated.

[Guest Emiliano]

In this situation, check box A(2)and file one Form 5500 for the plan. Plans of controlled group members are considered a single plan for 1999 filings.

[bzorc]

You also report your controlled group on Page 4, Item 8 of the 5500, using the code "3H".

[Dawn Hafner]

See page 10 of the Form 5500 instructions. Generally you would file the controlled group on one 5500, but if "the benefits in which the funds attributable to each employer are available to pay benefits only for that employer's employees" -- separate 5500s must be filed even though it is a single plan for one controlled group.

I think you need to look at your document. As long as it doesn't contain language that specifies that only part A of the trust is to be used to pay benefits to company A and part B of the trust is used only to pay benefits to company B I would file one 5500. It doesn't matter that the contributions are being allocated on a per employer basis as long as the plan doesn't contain this separate benefit language.