The non-profit org. (which arguably is controlled by a church - that's a separate discussion) has filed Form 5500s for many years (never thinking it could be a church plan) but never did the 410(d) election formally via on the Form 5500 or Determination letter application. Does this mean that this org. is still eligible to be a church plan or is the filing of the Form 5500 deemed an irrevocable election? If there is any authority for this, I would also appreciate the citation. Thank you!

The regulations under Code section 410(d) tell you how to make an election for a church plan to be subject to ERISA and the Code provisions from which a church plan is otherwise exempt. The regs are specific about how to do that, and there isn't an "inadvertent" election concept built into them. In PLR 8536041, the IRS determined that a prototype retirement plan adopted by a church was a church plan despite the fact that the plan document was written as if the plan was covered by ERISA.

The DOL, in Advisory Opinion 85-32. determined that a pension plan adopted by a Catholic hospital was a church plan despite the fact that the plan administrator had filed a 5500 for the 1982 plan year and paid PBGC premiums in 1982 and 1983.

So, there's some authority that supports the notion that an employer can't inadvertently make a 410(d) election.

Now, here's a caveat, and it's a big one: The IRS, DOL and PBGC have been meeting for the last several years (since 2003) on church plan ruling issues. Without going into all the whys and wherefors as to why those discussions are taking place, I recently learned that the concept of an inadvertent 410(d) election has been/is being discussed, and that, if an employer has acted like its plan is ERISA-covered in plan language, filling 5500s, etc., it may be treated as having made an election to be subject to ERISA.

So, stay tuned. Church plan guidance is on the IRS guidance plan for its guidance fiscal year ending 6/30/09, so we'll have to see what comes out of the IRS, DOL and PBGC discussions. Presumably a decision that there is such a thing as an inadvertent 410(d) election would be applied prospectively. But you never know.

Hope this helps.

Thanks so much - that was comprehensive. Have a nice weekend.

I thought this happened in the past (that is, the IRS treated a 5500 filing as "making an election"), but that position changed upon a formal challenge.

You can make a 410(d) election and attach it with your 5500 - that would be an affirmative election (the coverage is not triggered by merely the 5500 filing, until we hear otherwise from the IRS/DOL). Another method would be to include such a 410(d) election with the plan's determination letter filing.

I can't seem to find a copy of 85-32 anywhere...not on the DOL website or even on BNA. Does anyone have a copy or a link to it?