Cafeteria Plan Year End Surpluses Example.xls

Example

Handling Year End Surpluses in Cafeteria Plan Account

The following example could apply for a medical expense reimbursement account,
dependent care or adoption expenses.


During the plan year, the four employees participating did this:

	Contribution	Amount	Unused
Employee	for Year	Reimbursed	Amount

Joe	$1,200	$1,000	$200

Sally	$900	$900	$-

Bill	$750	$700	$50

Anne	$600	$600	$-

Total	$3,450	$3,200	$250


Available for Disposition		$250

The employer could keep the amount available for disposition.

The employer could also distribute the amount to the employees like this:

		Percentage	Employee's
	Contribution	of Total	Share of
Employee	for Year	Contributions	Unused $

Joe	$1,200	34.78%	$86.96

Sally	$900	26.09%	$65.22

Bill	$750	21.74%	$54.35

Anne	$600	17.39%	$43.48

Total	$3,450	100.00%	$250


The Employee's share of unused contributions could be paid directly to the employee,
as taxable W-2 income.

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