Q. An FSA plan participant has transferred from one division of a
company that I administer with Fast-Flex Plus to another division. These two divisions are part of the
same company, and share the same flex plan document, but I administer them separately. How do I move the
participant’s FSA monies from one affiliated company division to another mid-year?
A. There may be many ways to do this, but we suggest two options:
Carry forward each of the transferring employee’s current trust balances from Company A to Company B as a single
“special withholding”. By “trust balance” we are referring to the number at the
bottom of the “TRUST BALANCE” column on the detail pages of the Individual Employee Transaction report.
(We are not referring to the Summary Page where the “Balance” column is based on total-year Projected Deposits.)
Within Company B, set up the transferred employee as a new participant. Be certain to enter his
scheduled paycheck withholdings. Next, make a corresponding special withholding in Company B’s transaction
file (dated the date of the transfer) for each of his trust balances that he has in Company A. If any of
the Company A balances happen to be negative because the participant has been reimbursed more year-to-date than he has had
withheld from his paychecks, enter the withholding as a negative amount. (Fast-Flex will ask you to verify
that you really do intend to enter a negative withholding, but it will let you do it.) Finally, if there
are any outstanding (unpaid) reimbursement requests in Company A, enter them in Company B.
In Company A, make a special withholding(s)
to offset the balance(s) that was transferred to Company B. For example, if $247.00 was added to
Company B as the special withholding carry-forward, then make a special withholding in Company A for -$247.00 (negative).
Next, mark the employee as “Terminated” on page one of the Employee Data screen to prevent additional paycheck
withholdings for him in Company A.
Participant’s transactions are spread across two companies which will make YTD reporting and analysis for him
Duplicate into Company B each and every one of the transferring employee’s withholding, reimbursement request,
and reimbursement payment transactions that took place while he was at Company A. Refer to the detail pages
of the Individual Employee Transaction report from Company A to see a listing of these individual transactions.
Within Company B, set up the transferred
employee as a new participant. Be certain to enter his scheduled paycheck withholdings. Next,
make a corresponding special withholding in Company B’s transaction file for each of his individual paycheck withholdings
that he had while in Company A. Also make a corresponding reimbursement request for each reimbursement
payment that he received while he was in Company A Be certain to keep the posting date of
the reimbursement request the same as it appears in Company A. Answer “Yes” when asked if this
reimbursement request has already been paid. Finally, if there are any outstanding (unpaid) reimbursement requests in
Company A, enter them in Company B.
In Company A, “Void” each and every one of the employee’s transactions. When
this has been done, mark the employee as “Terminated” on page one of the Employee Data screen.
Advantages: All of
the participant’s transactions now appear in Company B which makes reporting and analysis for him easier.
on how late in the fiscal year you are, this option can be much more involved with greater opportunity for a data entry error.
Also, it makes it appear that the employee was never in Company A and instead was in Company B all year long, which
is not truly the case.