I have a client that wants to close their Section 125 FSA plan. I can find tons of information on opening the plan, administering the plan, etc and so on, but not a peep on closing the plan. Obviously terminating the plan is easiest as-of the end of the plan year, which I believe is a fiscal year-end sometime in the summer (still checking on this). I doubt they'll see next summer.
Does anyone know of any source that addresses the plan termination issues?
They'd like to do this with the least amount of tax implications for the company - and if you read between the lines, for the employees too. There's money that's been withheld and not paid out as a benefit, and benefits paid out that exceed the amount withheld (on an individual employee basis).
The plan administrator (insurance agent type folk) isn't quite as forthcoming on closing up the shop. I suspect it's because they don't know themselves.
Thanks for any direction you can point me in.