ASPPA Asks for Clarity About MEP Reporting

The American Society of Pension Professionals & Actuaries (ASPPA) is requesting clarification for Forms 5500 and 8955-SSA filed by multiple employer plans (MEPs).

In a letter to the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS), ASPPA noted that on May 25, 2012, the DOL issued two advisory opinions (see “DOL Says Open MEPs Not Single Employee Plans”) that have been read to mean that many current MEPs may not qualify as a single plan under Title I of the Employee Retirement Income Security Act (ERISA). Instead, the employers jointly sponsoring the MEP would be treated as each sponsoring a separate plan, and, as a result, each would be obligated to file its own individual Form 5500.  

According to the letter, “Unfortunately, nothing in the Form 5500 instructions has ever indicated that a MEP, for purposes of filing a single Form 5500, must meet additional requirements beyond the fact that the sponsoring organizations were not part of the same controlled group. Additionally, it would appear that, for purposes of the reporting provisions of the Internal Revenue Code (IRC), MEPs should continue to file a single Form 5500 covering all the employers jointly sponsoring the plan. To date, no guidance has been issued by either the department or the IRS advising plan sponsors on how to resolve the inconsistent rules that apply to the singular reporting form (i.e., Form 5500) mandated by both agencies as the vehicle for satisfying a plan sponsor’s statutory reporting obligation.”  

The group said this inconsistency puts plan sponsors in an impossible circumstance with no guidance from either the DOL or the IRS. Many plan sponsors participating in MEPs have been relying on the guidance in Revenue Procedure 2001-21 and view it as governmental approval of these arrangements. The absence of any indication in the Form 5500 instructions of a “commonality” requirement has led many plan sponsors to the good faith belief that this approach had been sanctioned by both agencies.   

ASPPA recommends that the DOL and IRS jointly provide guidance that clarifies and resolves the issue. It further requests that the IRS affirm through formal guidance that a single Form 8955-SSA should be filed under IRC §6057 by the plan administrator for any plan subject to IRC §413(c).  

“Until clarified, transitional relief should be provided that would deem a plan sponsor participating in a MEP to have satisfied its reporting obligations under Title I of ERISA and the IRC if a Form 5500 has been filed for the MEP as a single plan. The relief should be made available for any plan year that begins on or before formal coordinated guidance is issued by the department and IRS. Affected plan sponsors should also be given the option to file individually prior to this deadline,” the letter states.  

The letter is here.