What Do I Do Now?

There are several administrative procedures that must be met to comply with Section 125 code legal requirements.

1. A plan document must be established. This document outlines specific details, such as a description of the employee benefits that are covered through the plan, participation rules, annual limits, election procedures, eligibility and employer contribution. It also defines the plan year.

2. A summary plan description (SPD) must be distributed to all participants. Section 104(b) of the Employee Retirement Income Securities Act of 1974 (ERISA), the basic law designed to protect the rights of participants and beneficiaries of employee benefit plans, requires that an SPD must be distributed to all participants no more than 90 days after an employee becomes a participant or within 120 days of the plan becoming subject to ERISA. The SPD summarizes specific details of the plan, claim filing procedures, and information concerning plan sponsorship and administration.

3. There's ongoing compliance that must be attended to. The laws are constantly changing and being updated. Federal legislation requires that section 125 plans can't discriminate as to eligibility and benefits being provided. Failure to meet the nondiscrimination requirements would eliminate the tax-free status of the benefits provided to the highly compensated and/or the key employees.

For all employers, the cost of implementing the plan is recovered through tax savings during the first few months. Now's the time to act -- to benefit your employees and your business -- and start saving money.

As a Plan Service Provider , we provide all documents to get you started and to continually keep you in compliance with the regulations. Also, we provide year-end plan audits to make sure your plan is in compliance.

Contact:
Mike Edwards
800-463-8020 or E-mail: mebginc@mebginc.com