(b)lines Ask the Experts – Dual Entities

A reader asks: “Does this entity have to file a Form 5500 and have a plan audit?  Does it matter whether or not the employer makes employer contributions to the plan?”  

David Levine, Groom Law Group, answers:    

The Form 5500 instructions provide that a governmental plan does not have to file a Form 5500 annual report or have a related plan audit.  It does not matter whether or not the employer makes employer contributions to the plan.  This is because the plan would be exempt from ERISA as a governmental plan and be relieved by the IRS from filing under IRS Announcement 82-146.  (Trivia note: Before that 1982 announcement, governmental plans were supposed to file now-discontinued Form 5500-G.)  As such, the hospital in this example would not be required to file.    

Please note that, because upcoming IRS guidance on the definition of “governmental plan” may impact the boundaries of what constitutes a “governmental plan,” governmental plan sponsors may want to review their governmental plan status when this guidance is issued.  

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.