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CCH® PENSION — 08/03/10

Multiemployer plan expenses paid by contributing employer and not reimbursed by plan are not required to be reported on Schedule C of Form 5500

In the context of a collectively bargained multiemployer plan, EBSA has clarified in an information letter that plan expenses paid by a contributing employer and not reimbursed by the plan are not required to be reported on Form 5500 Schedule C.

Schedule C information is generally required for each person who received, directly or indirectly, $5,000 or more in total direct or indirect compensation in connection with services rendered to the plan or the person's position with the plan during the plan year. The instructions to the Schedule C, however, specifically exclude certain payments, such as certain compensation paid by the plan sponsor to its employees (for services to the plan) and other plan expenses paid by the plan sponsor, if such payments are not reimbursed by the plan.

The information letter states that, while an employer that participates in or contributes to a multiemployer plan would not be a "plan sponsor" within the meaning of ERISA §3(16)(B), for purposes of the Schedule C reporting requirements, payments by such employers, directly or through an employer association, or by participating employee organizations, should be treated the same as payments by a plan sponsor. Thus, according to EBSA, "payments to plan service providers that are not reimbursed by the plans and that are made by contributing employers, directly or through an employer association, or by an employee organization that serves as the collective bargaining representative of employees covered by the plan, are not required to be included in the information reported on the Schedule C." EBSA makes clear that the information letter is limited to Schedule C reporting requirements only.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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