short plan year and entry dates

[Guest mk2308]

We have a client that has an initial short plan year of 5/1 to 12/31. Plan document says for entry date "semiannual - first entry date: 1/1 or the date 6 months thereafter, coincident with or next following satisfaction of the eligibility requirements".

Question: What are the entry dates for the initial short plan year?

[WDIK]

Perhaps the plan document also designates the effective date as an entry date? If not, well, I'd rather not make disparaging remarks about your document.

If the only entry dates in the document are 1/1 and 7/1, it appears to me that you are limited to those dates, so that there would only be one entry date (7/1) in the short plan year.

[Tom Poje]

even more important,or at least just as important, what is the definition of comp?

is it whole year or date of participation?

[rcline46]

The law REQUIRES the effective date of the plan to be an entry date. So your entry dates are 5/1 and 7/1 based on the information provided

[Guest mk2308]

Can you tell me where I can find that the effective date is an entry date?

[WDIK]

rcline46:

I assume you are referring to the language of 410(a)(4) which indicates that an employee who has otherwise satisfied the eligiblity requirements must commence participation "no later than the earlier of--(A) the first day of the first plan year beginning after the date on which such employee satisfied such requirements, or

(B) the date 6 months after the date on which he satisfied such requirements."

The intent of my comments was to allude to the fact that there was probably more information in the plan document. I assumed that it was unlikely the document actually designated January 1st and July 1st as entry dates. Most of the language that I have seen refers to the 1st month, 4th month, 7th month etc.

That being said, one prototype document I am familiar with lists as one option for the definition of an Entry Date as "semi-annually, on the first day of the 1st month and 7th month of the Plan Year", with a separate election for making the effective date an entry date for special eligiblity in the first plan year. This seems to create a problem in a short year that does not contain two semi-annual dates.

Poorly drafted? Perhaps. Inconsistent with 410(a)(4)? It appears so.

Approved language? Yes. How should it be reconciled? I'm not sure.

[rcline46]

410(a) and its regs is where you will find entry dates - use your reference provider to check it.