Help with change in plan sponsor entity type.

[jkharvey]

Plan sponsor has changed entity type from PC to S-Corp. The EIN has also changed. These changes are effective in the middle of the plan year. How do I handle this? Is this a simple amendment of EIN? What about a short plan year?

How do I file F5500? Old EIN, New EIN or both?

[David MacLennan]

Keep in mind the plan is its own entity and can be sponsored by a successor employer or multiple employers. There is therefore no short plan year.

The new entity should adopt a corporate resolution adopting the existing plan. In addition, they should execute a plan document along with the resolution, although this is expensive and is sometimes skipped. I'm not an attorney, but in my opinion it doesn't make sense to not execute a plan document, since otherwise the new entity has not actually agreed to specific plan provisions (PPD attorneys have agreed with me on this point).

You would file only one 5500 with the new sponsor EIN, but you would indicate on the form the change of sponsorship in the appropriate line items.

I'm not sure if the IRS has addressed how you allocate the deduction, but a reasonable method based on compensation would probably be OK (I seem to remember some IRS promulgation that addresses this, perhaps for spinoffs, multiple employer plans or some other similar situation).