I'm filing a final 5500-EZ return (because the plan was closed and the assets distributed), but this is also the first return (the assets never exceeded $250,000 so there was no need to file). Should I check both boxes for the first return (A (1)) and for the final return (A (3)) on part 1 of the 5500-EZ? Or only one box -- either the first return or the final return?

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A terminating multiemployer welfare fund desires to distribute its surplus (which includes pre-tax employee contributions), by procuring benefits. Based upon a reasonable procedure, the trustees approved allocations for approximately 10 groups of employees, each employed by a different former contributing employer. Private letter rulings, such as PLR 201121028, have approved plan termination distributions to former contributing employers to hold and use allocated shares of the surplus for their employees' benefit. The expectation here is that the employers would then be able to drawn down the allocated surplus to pay the employees' portion of current health insurance coverage. Some of the employees do not want to hold the distribution but have agreed to provide the union with records of the co-pay obligations so these sums could paid along with the employer's share of the premiums. The funds can only be used to pay the employees' insurance premiums. Is anyone aware of any issues with the sponsoring union holding the distributed surplus for the sole benefit the covered employees and forwarding the employees' share of the premiums to the current insurance carrier?

Does anyone have any experience with using Davis-Bacon / Prevailing Wage fringe amounts to fund cash balance plans for employees? Here's the setup. Sponsor has about 100 employees, and probably 75% of them work Davis-Bacon jobs, and they get serious fringe amounts. Like, amounts between $10k and $30k per year are not uncommon. We use them in their 401(k) test, for instance, and the representative contribution rate for targeted QNEC purposes is a very nice 16%. Anyway, the sponsor (or at least his CPA) was intrigued by the idea of a cash balance plan to get the owners (in their 50s) significant plan amounts. (Actually their DC plan is standalone 401k except for the Davis-Bacon amounts.) They don't even need all the D-B amounts in their ADP test, which would allow us to use still a bunch of them for 401(a)(4) testing between two plans. (DC plan would have individual allocation rates, basically being the D-B amount.) Could they steer some of those prevailing wage fringe amounts into a cash balance plan design? Figure we'd give most staff people a 3% of pay contribution credit and a 5% interest credit each year. For the majority of the folks, their fringe amounts would cover either or both of those additional accruals. Any issues preventing this? Is it really different from funding a DC plan's allocations with the Davis-Bacon amounts? I could imagine any particular labor regulatory board not being thrilled with funding their interest credit that way (although is that even necessarily true?), but I'm not sure I see much difference between putting $5,000 of Davis-Bacon money as a contribution credit into their DC account versus funding a cash balance contribution credit for them. Am I missing something (obvious or not)? Plus, the Davis-Bacon amounts are currently in the low twenties as a percentage of 404 payroll, so perhaps a CB plan alleviates some deductibility concern, too. (And would be PBGC.) Sponsor figures if he's got to contribute the 3% on top of what they're already going to get for their fringe, it's a dealbreaker, but if he can split the fringe between the two plans (required amount to CB, the rest as DC), he'd be more willing to proceed.

So the Hartford will not do a fidelity bond for a multiple employer plan. Does anyone have any recommendations of insurers that will accept it?