Should form SF be filed after divorce with a owner and spouse plan?

A one participant plan covering owner and the spouse. Should 5500 SF be filed after divorce, if the none owner spouse stays as participants?

1 hour ago, CKocher said:

A one participant plan covering owner and the spouse. Should 5500 SF be filed after divorce, if the none owner spouse stays as participants?

Yep. 

About whether and when a plan might be no longer a one-participant plan as Form 5500 instructions use that term, an employer/administrator might consider not only when a marriage ended but also whether a former spouse who had been a community-property or equitable owner during the marriage became a title-holding partner.

For example, if a divorce’s settlement agreement provides a former spouse an interest in a partnership or an interest in a limited-liability company treated as a partnership, that interest could make the former spouse a partner. See 29 C.F.R. § 2510.3-3(c)(2) https://www.ecfr.gov/current/title-29/part-2510/section-2510.3-3#p-2510.3-3(c)(2).

BenefitsLink mavens, if a former spouse gets no partnership interest, how would you advise a plan’s administrator to report this situation: The divorce decree is made after the end of the to-be-reported-on plan year but became legally effective months before the plan’s administrator completes its Form 5500 report on that plan year. Would you:

Report as a one-participant plan (because those were the facts on the last day of the plan year)?

Report as an ERISA-governed plan (because the Form 5500 instructions defining a one-participant plan speak in present tense—“covers”—and when the administrator makes its report the plan covers a participant who is neither a partner nor a partner’s spouse)?

Thanks, Peter.

So, as expected, legal status during the plan year dictates.

6 hours ago, Peter Gulia said:

For example, if a divorce’s settlement agreement provides a former spouse an interest in a partnership or an interest in a limited-liability company treated as a partnership, that interest could make the former spouse a partner. See 29 C.F.R. § 2510.3-3(c)(2) https://www.ecfr.gov/current/title-29/part-2510/section-2510.3-3#p-2510.3-3(c)(2).

If its a partnership or taxed as a partnership and the the former spouse is awarded an interest, I agree, it could make the former spouse a partner.  

If its a C-Corp, you have to file the 5500 or 5500-SF.

If its an S-Corp, you would still be required to file a 5500-EZ if the interest makes both former spouses 2% S-Corp shareholders...

CKocher, I don't here express a view about whether an employer/administrator selects between Form 5500-EZ and Form 5500-SF based on facts during the plan year, as of the end of the plan year, or when the administrator files its report.

Several interpretations are plausible, and I ask what our BenefitsLink neighbors think.