What are the requirements for a governmental plan to invest in a group trust?

A governmental plan is required to be a qualified governmental plan under section 414(d) of the Internal Revenue Code, as in effect on March 20, 2018. The plan must be established or maintained by an eligible governmental employer and meet certain additional requirements related to participation, vesting, and funding. Additionally, a governmental plan is required to adopt a resolution that specifically authorizes the investment of plan assets in a group trust.

What are the reporting requirements for an eligible employer?

An eligible employer making contributions to a group trust must report the amount of its contributions on Form 941, Schedule R, or Form 943, as applicable. The eligible employer must also report the amounts of any distributions made to employees during the year on Form W-2, Box 1.

What are the requirements for a church plan to invest in a group trust?

A church plan is required to be a qualified employer plan under section 401(a) of the Internal Revenue Code, as in effect on March 20, 2018. The plan must be established or maintained by an eligible employer and meet certain additional requirements related to participation, vesting, and funding. Additionally, a church plan is required to adopt a resolution that specifically authorizes the investment of plan assets in a group trust.

What is a group trust retiree benefit plan?

A group trust retiree benefit plan is a trust created or organized in the United States and maintained at all times as a domestic trust in the United States, that holds assets of one or more church plans or governmental plans for purposes of section 401(a)(24) or 414(d), respectively. The group trust instrument must expressly limit participation to group trust retiree benefit plans and prohibit assignment by an adopting plan of any part of its equity or interest in the group trust.

What are the tax consequences of a distribution from a group trust?

A distribution from a group trust is generally not treated as compensation. However, if the distribution is a prohibited transaction under section 4972 or if it results in the plan's disqualification, then the distribution may be subject to taxes and penalties.

What are the tax consequences of an employee's participation in a group trust?

An employee who participates in a group trust is generally not treated as having received additional compensation. However, if the employee withdraws funds from the group trust and that amount is included in the employee's income, then the employee may have to pay income tax on that amount.

What are the tax consequences of an eligible employer's contribution to a group trust?

An eligible employer making contributions to a group trust on behalf of its employees is generally not treated as having made a direct or indirect payment of compensation to the employees. However, the eligible employer must still report wages paid to its employees in its income tax return and payroll tax returns.

Form 5316

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Application for Group or Pooled Trust Ruling

Rev. December 2021

Form 5316, which is required for electronic submission through Pay.gov, can be accessed and downloaded from Pay.gov. More information can be found on irs.gov/Form5316.

Instructions

Form 5316 Instructions - Instructions for Form 5316, Application for Group or Pooled Trust Ruling

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FAQ

What are the requirements for a governmental plan to invest in a group trust?
A governmental plan is required to be a qualified governmental plan under section 414(d) of the Internal Revenue Code, as in effect on March 20, 2018. The plan must be established or maintained by an eligible governmental employer and meet certain additional requirements related to participation, vesting, and funding. Additionally, a governmental plan is required to adopt a resolution that specifically authorizes the investment of plan assets in a group trust.
What are the reporting requirements for an eligible employer?
An eligible employer making contributions to a group trust must report the amount of its contributions on Form 941, Schedule R, or Form 943, as applicable. The eligible employer must also report the amounts of any distributions made to employees during the year on Form W-2, Box 1.
What are the requirements for a church plan to invest in a group trust?
A church plan is required to be a qualified employer plan under section 401(a) of the Internal Revenue Code, as in effect on March 20, 2018. The plan must be established or maintained by an eligible employer and meet certain additional requirements related to participation, vesting, and funding. Additionally, a church plan is required to adopt a resolution that specifically authorizes the investment of plan assets in a group trust.
What is a group trust retiree benefit plan?
A group trust retiree benefit plan is a trust created or organized in the United States and maintained at all times as a domestic trust in the United States, that holds assets of one or more church plans or governmental plans for purposes of section 401(a)(24) or 414(d), respectively. The group trust instrument must expressly limit participation to group trust retiree benefit plans and prohibit assignment by an adopting plan of any part of its equity or interest in the group trust.
What are the tax consequences of a distribution from a group trust?
A distribution from a group trust is generally not treated as compensation. However, if the distribution is a prohibited transaction under section 4972 or if it results in the plan's disqualification, then the distribution may be subject to taxes and penalties.
What are the tax consequences of an employee's participation in a group trust?
An employee who participates in a group trust is generally not treated as having received additional compensation. However, if the employee withdraws funds from the group trust and that amount is included in the employee's income, then the employee may have to pay income tax on that amount.
What are the tax consequences of an eligible employer's contribution to a group trust?
An eligible employer making contributions to a group trust on behalf of its employees is generally not treated as having made a direct or indirect payment of compensation to the employees. However, the eligible employer must still report wages paid to its employees in its income tax return and payroll tax returns.

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Federal tax forms

Form 5316 is one of Federal tax forms that are documents used to report and file federal income taxes with the Internal Revenue Service (IRS) in the United States. These forms are used by individuals, businesses, and organizations to report their income, deductions, and other relevant information necessary for calculating their federal tax liability.

The most commonly used federal tax form is the Form 1040, which is used by individual taxpayers to report their personal income tax. Other commonly used forms include the Form 1065 for partnerships, Form 1120 for corporations, and Form 990 for tax-exempt organizations.

Federal tax forms typically require taxpayers to report various sources of income, such as wages, salaries, and tips, as well as income from investments, rental properties, and other sources. The forms also allow taxpayers to claim deductions and credits for various expenses, such as charitable contributions, mortgage interest, and healthcare expenses.

It is important to file federal tax forms accurately and on time, as failure to do so can result in penalties and interest charges from the IRS.

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