Who's the Employer?

A separate Form 5500, with box A(2) [single employer plan] checked, must be filed by each employer participating in a plan or program of benefits in which the funds attributable to each employer are available to pay benefits only for that employer's employees, even if the plan is maintained by a controlled group.

1. contributions from a given employer are only allocated to employees of that employer; and
   
   
2. forfeitures from employees of a given employer are only allocated to other employees of that employer or to reduce future contributions of that employer.

• Prudent PEO sponsors a multiple employer plan with its clients signing on as cosponsors. Prudent determines that the client is the true common law employer of worksite employees at the client's premises. The plan provides that contributions attributable to a given employer benefit only the employees of that employer. However, funds are commingled to a degree. Hence funds from one employer could be used to pay benefits to another employer (even though the accounting records of the credits to the employee accounts show allocations in accordance with the terms of the plan). Accordingly, Prudent files a single 5500 form for the plan, checking box A(3) to show it is a multiple employer plan. It files a separate schedule T for each participating employer, showing each employer's compliance with the 410 coverage tests.
  
  
• Same facts as the prior example, except that each employer has its own trust document. At all times funds for a given employer are kept separate from the funds of any other employer. At no time can funds of employer A be used to pay benefits to employees of employer B. Now it is treated for 5500 purposes as though each employer maintained its own single employer plan. A separate 5500 form would be filed for each such plan. In this case, mark A(2) ("single employer plan") on each plan's Form 5500.