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Section 125 Plan Certification
A new administrative rule, effective January 1, 2017, requires IPERS-covered employers that offer elective employer contributions to Section 125 plans to certify annually with IPERS that certain conditions are met. This new annual certification is required only if you:
Offer a Section 125 plan to your employees that meets all requirements in Internal Revenue Code Section 125, and
Pay elective employer contributions under the Section 125 plan that you report as IPERS-covered wages.
If your cafeteria plan does not meet all requirements in Internal Revenue Code Section 125, it is not a Section 125 plan and contributions to it cannot be IPERS-covered. In this case, you do not need to provide a certification form to IPERS. Simply ensure that contributions to the plan are not reported as IPERS-covered wages after January 1, 2017.
When an IPERS compliance officer visits you for a compliance review, the officer will review your written cafeteria plan document to ensure Section 125 contributions are being covered in accordance with all applicable laws and rules.
Learn more from the resources listed below:
Proceed with caution; the rules governing Section 125 plans are complex. If you are unsure which wages should be covered, submit your plan documents to IPERS for review.