How Does a Section 125 Plan Document Differ from an SPD?
Employee advantages may be complex, and whilst handling compliance, files regularly reason confusion: the Section 125 plan record and the Summary Plan Description (SPD). Though they will seem similar, they serve one of a kind functions and are required by means of unique businesses. If you're an agency or HR expert looking to recognize how they range, this weblog will stroll you via every one in a clear, structured format at the same time as incorporating the important thing phrases section 125 plan report and section 125 document requirements . What Is a Section 125 Plan Document? A Section 125 plan document is a proper legal report required by the IRS for employers supplying cafeteria plans. A cafeteria plan, under Section 125 of the Internal Revenue Code, allows employees to choose among receiving certain advantages or cash compensation. When personnel select benefits, they do so the use of pre-tax greenbacks—this saves both the employee and employer cash on taxes. The report ou...