Cafeteria Plans-termination issues pending mid-January change in emplo

[Guest slapmeat]

My firm is about to dissolve. All employees are being made offers of employment by a comnparable firm. First, what choices does our firm have for the surplus in its cafeteria plan, and what are the risks/benefits of each of those choices from the employer's and the employees respective perspectives? Do the answers depend on whether the new firm has a cafeteria plan or not or some other pension or welfare plan?

Second, given that this change in employers will happen in mid-January, should our firm not allow its employees to enter a flex plan this year under these circumstances?

Thanks for your input.

[Lisa Hand]

What is the Plan Year?

[Guest slapmeat]

I believe that the plan was first put in place in 1997. I do not know if it was amended or if it was replaced since first instituted but I doubt it.